Small Business Success | Small Business Mentoring

Dixie Yonkers Special To The Business Review

Getting some outside advice can make the difference between going it alone and going under, or making an idea work. For small businesses, this translates into soliciting advice and guidance from a board of directors or advisors. Some are trying it and finding the results more than worth the effort.

Kathleen Godfrey, sole proprietor of Kathleen Godfrey Financial Planning of Colonie, was in business four years when she heard about the idea of assembling an advisory board. She invited five professionals whom she knew and respected from various fields to serve for one year. They would meet once every two months and listen and comment while she presented her marketing plans and financial statements. In turn, Godfrey committed to donating one-quarter of her net profits at the end of the year to a charity of the advisory group’s choosing.

"When you are on your own, it is so easy to procrastinate, to get sidetracked, so your business isn’t growing the way it could be," Godfrey said. "They gave me someone else to be accountable to. I couldn’t risk losing credibility in the eyes of people I really respected."

That accountability did the trick. Godfrey’s bottom line increased 37 percent in the year since the advisory group began. On May 9, she handed a check for $2,500 to the Legal Project, a nonprofit group that assists victims of domestic violence.

"It’s been a wonderful experience," she said. "I get a lot of good ideas from the group. They’ve seen potential problems before they actually became problems or [have] seen things from another angle."

Godfrey has made it easy for the group to help her, said David Rollins, marketing manager for Plug Power Inc. of Latham, a member of the advisory group. "It has served a great purpose for her. Not wanting to waste the group’s time or embarrass herself has been the glue that holds it together," he said.

While it has been difficult to report her progress at times, Godfrey said the group has helped her to view herself more objectively.

"You have to be able to be a critic of your own business," she said.

Rich Bollam, a partner in Bollam Sheedy Torani & Co. LLP CPAs in Colonie, also has seen the value of outside advice. While his firm has not established a standing advisory board, it has on three occasions invited advice. Eight to 10 of the firm’s most valued clients came together for three hours to respond to a prepared agenda. No executives from the firm were present, said Bollam, just the clients and a tape recorder.

"The idea is to get some good clients in a room and get a high-quality information exchange," he said. With no company employees present, the conversation is candid and objective.

Though the investment is nominal, the feedback is very valuable, Bollam said. The firm has found out what it does well and what clients would like it to do in addition. It has gotten leads for potential new clients and direction for future marketing. The client advisory boards have also helped spread the word about the quality services the firm does offer.

Bollam Sheedy’s client advisory boards have met about once every two years, he said. The firm has arranged one meeting for a client’s firm as well, and would like to offer this type of service more.

"To me, with very little effort and a little organization, you can get a lot of low-cost information from folks around town," Bollam said. "Anybody should do it," he said. "It’s almost like, `Should I plan?’ Everybody should plan."

Still another take on the use of outside boards is that of Taconic Farms Inc., breeders of laboratory rats and mice in Germantown. Though the company has recently grown past the small-business category, it has remained a family-run business for the past 49 years. From its earliest, even as a very small company, an outside board of directors was in place. Now, with three brothers collectively running the business and their mother chairing the board, that board continues to provide accountability and expertise.

It has been important not to have those who run the company on the board, said Joseph Phelan, co-owner of Taconic Farms with his brothers Sam and Richard.

The Taconic Farms board consists of six members, some of whom have served for many years. They bring business, legal and financial expertise, as well as technical expertise in veterinary pathology and nutrition, to the company’s decisions, Phelan said. The board meets twice a year, and individual members are called upon between meetings as needed.

Getting the three brothers to agree can be difficult at times, said Phelan, and then there’s the board to answer to. Phelan said his mother, now in her 80s, is just now figuring out that her sons have a pretty good idea of how to run a business.

That family dynamic that Taconic has somehow been able to keep positive is often the weak link, said Stanley Simkins, president of Menands-based Management Advisory Group and director of the Siena College Family Business Institute. Small or family-run businesses often make the mistake of putting inside people on the board. The board then fails to give objective advice.

"The idea behind a board of directors or advisory board is to get accountable, objective expertise, structure and discipline," Simkins said. "But if the implementation is to bring in your buddies, what have you gained?"

Though advisory boards and boards of directors can be a valuable thing to a small business, it matters how they are established and run. In Simkins’ view, it is a rare small company that has done it well.

Simkins’ word to the wise is, "Proceed with caution."