Advisory Groups - What You Should Know
Isolation is one of the most
challenging aspects of owning a business. Cliché or not, it really is lonely at
Small business owners don’t
have a board of trustees to act as a sounding board. There’s no one to
brainstorm solutions with, no one to validate and challenge ideas and decisions.
Sure, entrepreneurs can always
bounce their ideas off employees, but it’s not the same. For one thing,
employees are predisposed to say what they think the boss wants to hear. For
another, they may not have a “big picture” understanding of the business. And
some matters are too confidential to share.
But that doesn’t mean that, if
you’re an entrepreneur, you’re doomed to a lonely life in the corner office.
That’s what peer advisory groups are all about.
How Peer Groups Work
Peer advisory groups have
existed for several decades, and because they fill an important niche, their
popularity continues to grow.
Here’s how they work. Every
month, the group—composed of business owners, CEOs, COOS, etc.—meet. Their
businesses are similar in size and complexity, but represent non-competing
fields. The discussion is led by a professional facilitator, whose job is to
initiate a candid, productive dialogue.
One month, the topic may be
brainstorming strategies for cutting expenses. The next, it may be marketing
tactics…employee compensation…or developing a succession plan. The topics
change, but the goal doesn’t: to explore new ways of running a more successful
The Power of Many
Many small business owners get
so caught up in day-to-day activities, they forget their first role: company
visionary. Peer group discussions prompt members to step back and take the long
view, to think about their goals and plans.
In addition, members have the
opportunity to pose their business problems to the group and ask for
suggestions. Usually, someone else has already dealt with the same problem, so
members benefit from each others’ hard-earned wisdom.
Help During Lean Times
During good times, a peer
group can help you grow your business. There’s usually all kind of stimulating
ideas in the air. But during tough times, harnessing peer power can be even more
are tough, you have to do unpleasant things, like cutting expenses. A peer group
pressures you to follow through. For
example, if you vow to raise your prices during the August meeting, expect to be
asked for a progress report in September.
In fact, this may be the one
place where your associates congratulate you for laying off an employee. They
know firsthand how hard it is to do. They also know how necessary it is to your
company’s long-term survival.
Can you do all these things on
your own? Sure. Are you likely to? No.
Will It Work for You?
Members who get the most from
their peer groups have several common characteristics. First, they are not only
committed to growing their businesses, they’re willing to give and receive
constructive criticism. They understand the necessity of stepping back from the
business and are willing to put aside a couple of hours a month to attend
How much does it cost?
Usually, members pay an initial start up fee of about $500 to $1,000, along with
quarterly fees that may total $2,000-$4,000 a year, depending on various
factors. If that seems high to you, consider this: retention rates are quite
high—an indication that most members find their peer groups a worthwhile
“But I don’t have the money,”
some people say, or “I don’t have the time.” Frankly, those are the very people
who are most in need a peer group. Peer groups inspire members to better manage
their time, boost their revenues, and set wise priorities.
If you’re interested or
curious, check out the peer groups in your area. Most organizations will let you
attend a meeting without cost or obligation, so you can see if it’s a benefit to
you. Sometimes, you need to attend several groups before you find one that
“clicks” with you.
How do you know if a group is
right for you? You’ll emerge from the meeting with a page full of notes, a head
full of ideas, and a fresh enthusiasm for your business. In other words, you’ll
Ray Silverstein is president of
PRO: President’s Resource Organization, a network of entrepreneurial peer
advisory groups in Phoenix and Chicago. The author of “The Best Secrets of Great
Small Businesses” and a columnist for Entrepreneur Magazine online, Ray may be
reached at 1-800-818-0150 or www.propres.com.