Only 6 per cent of small and medium-sized businesses have an advisory board, despite the valuable benefits a board can offer, according to a survey by the Business Development Bank of Canada (BDC).
Fifty-seven per cent of small and medium enterprises (SMEs) that did not have a board felt that implementing one required too much time, work and effort, according to the survey of 1,000 Canadian SMEs .
However, the vast majority (86 per cent) of entrepreneurs who do have an advisory board reported it had an important impact on their business success.
Companies with an advisory board tend to do better financially, and see other business benefits as well, found the survey.
"The benefits of having good-quality, independent advice from well-respected, experienced individuals is clear, and we now have research to support it," says Jean-René Halde, president and CEO of BDC.
"We have to encourage more entrepreneurs to use an advisory board so that we can grow the numbers that have one."
SMEs with an advisory board saw sales grow an average of 67 per cent in the three years after implementing an advisory board, while productivity rose an average of 6 per cent.
Between 2001 and 2001, businesses with an advisory board saw sales that were 24 per cent higher than businesses without a board, and saw productivity that was 18 per cent higher.
"An advisory board can be a sounding board to help busy entrepreneurs strategize about their business, broaden their vision and enhance their bottom line," said Halde.
"Unfortunately, there is a perception among those who don't have an advisory board that implementing one required too much work, time and effort. We must stamp out this notion that they are not worth the effort."
Most entrepreneurs look for expertise in accounting, finance, sale, marketing and human resources when forming an advisory board, found the survey.
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