Bob Burke
December 2, 2012
Beverage School at BevNet Live
KEY HIRES AND FORMING
AN ADVISORY BOARD
HOW TO FORMALLY TAP INTO INDUSTRY EXPERTISE
 Advisory work in assisting bringing natural, organic and specialty
products to market across most classes of trade
 Write business plans for raising capital and growth strategies for
management teams
 Co-Author/Publisher of the Natural Products Field Manual, Fifth Edition
and The Sales Manager’s Handbook
 Co-produce and co-lead seminars on “Becoming a More Effective
Sales Manager in the Natural and Specialty Channel” and “Financing
your Natural or Specialty Products Company”
 Serve as outside director of: Orgain, EcoFish, Nutrabella, American
Halal, FoodState
 Advisory boards: Mamma Chia, Runa, Theo Chocolate, Galaxy
Nutritional Foods
 Former director: Stonyfield Farm, Equal Exchange, Stirrings, NASFT
 Former VP Marketing & Sales, 11 years, Stonyfield Farm
 Named one of the "Top 25 Business Builders of the Natural Products
Industry for the last 25 years” by Natural Foods Merchandiser Magazine
Contact: 978-975-9902; Bob@NaturalConsulting.com
8 Cobblestone Lane, Andover, MA 01810
Website: www.NaturalConsulting.com
TAKING YOUR BUSINESS TO THE NEXT
LEVEL?
• Beginning with the end in mind
• Mapping out a plan
• Who’s executing?
• Internal
• Outsourced
• Upgrades
• What resources are necessary
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Capital
Service providers
Advisory board/board of directors
Share groups
DOESN’T ROLLING UP YOUR SLEEVES AND
WORKING 100 HOUR WEEKS BUILD CHARACTER?
• Think Boston …or Marky Mark
• “Work Smahter not Hahder”
• Each additional person frees you up to do higher return
activities
• What does making you 40-50% more productive do for the
company
• Have the courage and smarts to hire up
• Each key new hire should raise the bar in the organization
• What are your experience gaps?
• Where can you make the most impact
• Set S.M.A.R.T. goals
• Align goals and incentive plans across the team and
with the company and shareholders
• Set the pace
KEY ROLES
• Head of Sales (not you) or outsourced brand management
company/contract sales
• Sales Operations/Sales Support/Sales Admin
• Hub of the wheel (accounting, operations, sales, marketing, CEO)
• Anchor in the office for sales team and brokers
• Controller/CFO or outsourced
• Marketing Assistant to Mid Level Marketing person
• Collateral
• Trade shows
• Manage service providers
• Operations
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Sourcing
Managing co-packers
Inventory management
Transportation and warehousing
ADVISORY BOARD VS.
BOARD OF DIRECTORS
• Advisory Board
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Informal organizational role
Strategic guidance
Support the CEO and management team
Advise only
Often pre-institutional capital
Don’t hire/fire
No D&O insurance needed
• Board of Directors
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Formal organizational role
Strategic guidance and governance
Support CEO and represent investors/shareholders
Advise and decision making authority
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E.g. hire/fire CEO, approve budgets, cap-ex, comp plans
• Fiduciary duty/liability
• Potential liability
• Defined
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Group of business executives who meet on a consistent basis to provide leadership, support and constructive
feedback to the executive leadership of a company
PURPOSE OF FORMING AN ADVISORY
BOARD
• Scheduled time to:
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Think strategically
Hear objective feedback
Accrue knowledge and expertise
Fill experience gaps
• Gain valuable insight:
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Strategic thinking
Growth strategy
Invest in getting a core group of people up to speed and not just ad hoc advice
Advice on HR and organizational issues
Advice on raising money
• Personal development
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Coaching/mentoring of entrepreneur/CEO/team
Expands company network
Some accountability for CEO
Introductions
• Boost credibility with potential investors, customers, suppliers, service
providers
IDEAL BOARD COMPOSITION
• Consider needs of the business and stage of the business
• Critical objectives/hurdles
• Experience gaps (of founder/team)
• Individuals who are committed to engage the business,
not dilettantes
• Team oriented, collegial, honest, respectful,
constructive, problem solvers
• Diverse group with complementary functional skill sets
and industry experience and life stage expertise – also
“employed vs. retired”
• Willing to tell you what you need to hear, not want to
hear.
• Members that help build credibility, offer introductions
• Generally 3-6 members
TYPES TO AVOID
• Domineering, alienating personalities, oversized
egos
• Unable to build trusted, respectful relationships
• Inexperienced in the specific areas you need help
• Too busy, not enough capacity/bandwidth
• Rarely express a divergent opinion
• Conflicts of interest
HOW TO RECRUIT MEMBERS
• Be clear that you want a commitment, not community
service or “giving back”
• SBA’s SCORE (Service Corp of Retired Executives)
• Entrepreneurs in your industry who have cashed out
• Network with your peers, brokers, suppliers, NASFT,
BevNet
• Develop an ideal bio of what you are looking for
• Age, gender, industry diversity
• People you know, people you don’t know
• Find an anchor advisor
• Develop a pool
• Audition
SETTING THE EXPECTATIONS
• Create a mission statement
• Define the scope of issues
• Annual schedule/ frequency of meetings
• Set dates up front and far in advance
• Turnover of board members
• Prepare for meetings – arrive prepared
• Legal bases covered – e.g. NDA’s
• Honorarium/equity
COMPENSATING YOUR BOARD
MEMBERS
• Compensation sends the message that you are serious
• Contingent on:
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Your type of company
Number of advisors
Time required of advisors
Opportunity cost for some
• Equity, Cash or Free lunch?
• Opportunity to invest
• Compensation plans
• Stipend ($500-$1,000-$1,500/meeting)
• Equity/options (.5%-2%)
• Reimbursement of related out of pocket expenses
• Perks, tickets, industry events, recognition
• Peer networking with other successful people
• Fresh ideas, perspective, inspiration,
SOME GENERAL BEST PRACTICES
• Respect their time
• One on one meeting to get them up to speed
• Set expectations, also what do they want to know?
• Keep them informed
• Monthly email updates
• Conference calls for timely input on big issues
• Board packets in advance so they can arrive prepared
• Remove underperforming members
• Term limits, good idea
• Check in with them periodically on their interest
level/bandwidth
RUNNING PURPOSEFUL MEETINGS
• Your commitment
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Open and honest
Materials in advance
Setting expectations for meeting
Staying on agenda and allocated time for each topic
• Data review
• Sales, financial, operational results
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CEO temperature
Sales funnel
Discussion on agenda items
Note key action items, follow ups
IN CONCLUSION
• Advisory board members can be advocates, mentors, a
resource and provide perspective for a CEO
• You can be open and honest – they can’t fire you
• Generally focus on how to execute better and grow the
business
• How can they help with industry contacts and
relationships?
• Trusted individuals dedicated to seeing you succeed
• No company is too small to not benefit from having an
advisory board
Sample agreement – www.WikiCFO.com
Advisory Board Agreement¶
Whereas ____ (Company Name) (Company) desires to have ____ (Board Member) (Member) participate as a member of the (Company Name)
Advisory Board (Board) and Member desires to participate in such a capacity, this advisory board agreement establishes the business relationship
between Company and Member.
Scope of Board of Advisory Agreement: The sole purpose of the Advisory Board is to provide the CEO of Company with the varying perspectives of the
respective Advisory Board Members. All topics to be discussed at Board of Advisory meetings will be chosen by CEO of Company. The Board of
Advisors will not provide a consensus or vote on a course of action for Company. Member agrees to interact with Company in an advisory capacity
only and will have no responsibility or authority in the operations of Company’s business. The use of any information, perspectives or opinions provided
by members of the Board will be at the sole discretion of the CEO of Company. In deciding to take action on topics discussed at Advisory Board
Meetings the Company absolves Advisory Board Members of any and all responsibility and liability. Company bears the sole responsibility of deciding
what recommendations made by Board of Advisors or Board Member to accept or reject. Company also bears the sole responsibility regarding any
implementation and/or success of any recommendation made by Board of Advisory or Board Member.
Frequency of Advisory Board Meetings: The Advisory Board will meet three (3) or four (4) times a year. Company will notify Members the first (1st) of
each year the dates of the meetings for that year.
Member remuneration: Company agrees to pay Member (??) hundred dollars ($??.00) for each Advisory Board Meeting attended.
Termination: This Board of Advisors agreement can be terminated by either party with thirty (30) days prior written notice.
Termination notices will be mailed to the following addresses:
______________ (Company)
______________ (address){BR} ______________ (city & state)
______________ (Member)
______________ (address){BR} ______________ (city & state)
Confidentiality: Company will make Member aware of all conversations and/or materials that are deemed confidential. Any information in the public
domain will not be deemed confidential.
The terms and fees of this Advisory Board agreement are deemed confidential.
Governing State LAW. This Advisory Board Agreement is executed pursuant to, is intended to be performed under and shall be governed in its
interpretation and effect by the laws of the State of (?).
______________ (Company)
______________ Date
NATURAL PRODUCTS FIELD MANUAL
SIXTH EDITION
• Complete, comprehensive, 4 volume,
guide on “how to go to market” for
natural, organic and specialty products
• Includes CD-Rom with directory of top
natural retailers, mass-market natural
buyers, distributors, brokers, industry
resources, budget models, new item
forms and store logos
• Practical, proven, best practices shared
and illustrated by industry veterans
• Rich, insightful guest editorials by
notable natural buyers, brokers and
CEO’s
• $30,000 in coupons
• Half Day consulting by author
NPCI
• www.NaturalConsulting.com