30 May The Benefits of an Advisory Council with Doug Robbins
With decades of experience under his belt, business broker Doug Robbins knows a thing or two about every aspect of M&A and being a business broker. Having founded Robbinex in 1974, Robbins has enjoyed what can safely be called an illustrious career. He has completed over 400 business sales, personally invested in 32 businesses and is an active member in numerous M&A organizations.
In our most recent Business Brokerage Press webinar entitled “The Advisory Council with Doug Robbins,” he outlined both the benefits of an advisory council and how to form one. Business brokers and M&A advisors can benefit from helping clients create advisory councils in a variety of ways. Robbins believes that all business brokers should be aware of the ways that advisory councils can be of benefit.
Advisory Council vs. Board of Directors
Robbins believes that an advisory council is a very powerful tool. In his view, an advisory council is something like a board of directors, but with many key differences. For example, a board of directors often has equity in the business, whereas an advisory council does not.
Time Commitments Involved
In terms of the time commitment involved, Robbins feels that the best approach is to limit the number of advisory council meetings to 12 per year, with 3 quarterly meeting onsite with each meeting lasting approximately 3 to 4 hours. Additionally, he envisions 1 luncheon meeting per year and 8 Zoom meetings of about 1 ½ to 2 hours in length.
Importantly, he noted that not every business is right for an advisory council. He notes that the ideal business for an advisory council is one that is making between 3 and 25 million. He explained, “smaller than 3 million in revenue, the chances are pretty good that the businessowner will not want to spend the money.”
Bolstering Your Company’s Fundamentals
Robbins points to the fact there are eight fundamental needs of a business and that most entrepreneurs are good at one or two, or perhaps even 3 fundamentals, but never all 8 fundamentals. The advisory council, as well as other outside experts, can be a great way to fill in the gaps in an entrepreneur’s abilities.
He stated, “We need 3 to 5 outside experts with skills that are missing from the 8 fundamentals of a business situation…it is necessary to have a team that understands the strengths and weakness of a company.”
Beyond understanding the strengths and weaknesses of a company, it is also important for the advisory council to understand the goals of the business and create a business strategy. Understanding the lifetime goals of the entrepreneur, what they want to accomplish, and the work necessary to reach those goals, are all of vital importance.
