Establishing an Advisory Council Can Boost Small Business Success

Media Contact: Barbara M. Fornasiero 248.651.7536; cell 586.817.8414; barbara@eafocus.com 

Mount Clemens, Michigan---June 3, 2009--- Mike Ringler, CPA, believes too many businesses are overlooking a smart management tool to generate innovative ideas, strategize on important decisions and help plan for stronger times ahead. Mr. Ringler, founder of Ringler & Co., PC, a Michigan-based certified public accounting firm offering accounting, tax and business advisory services to entrepreneurs and small businesses, says an advisory council (also called an advisory board) can be a secret weapon for success.

"Many entrepreneurs and small business leaders already gather information from a variety of sources, such as their trusted accountant, attorney, financial advisor, insurance agent and marketing specialist, to make crucial business decision,” says Ringler. An advisory council broadens the concept of tapping into outside expertise by establishing a formal mechanism to help increase one’s business advantage," says Mr. Ringler, who has served on advisory councils and also helped create them for clients.

Mr. Ringler notes that an advisory council differs from a board of directors in that members do not have the authority to implement corporate decisions. Also, business owners don’t have the fiduciary responsibilities they normally would with an elected voting board. Because advisory councils are less formal, they are relatively easy and inexpensive to establish, and the business owner controls the type and amount of information released.

"Any company with annual revenue greater than $500,000 should consider building an advisory council. At that revenue milestone, your business is likely established and growing at a pace where high-level, outside expertise can benefit your company’s strategic planning process and ultimate business success in terms of growth and value," offers Mr. Ringler.

When choosing council members, Mr. Ringler says to consider recruiting advisors who have a genuine interest in supporting the company owner’s efforts and want to see the business develop and thrive.

"It's important to think not only in terms of colleagues tied to the business, but to reach outside your industry and pull in critical thinkers with respected opinions. Good choices might be industry professionals in your field who are not competitors, management experts in an area where you lack strong expertise (such as accounting or legal), and individuals sought for strategic alliances who can connect the business to the next level of profitability," explains Mr. Ringler.

Although an advisory council does not have all of the legal conditions of a formal board of directors, owners still have a responsibility to ensure this informality will work for them and not against them. That’s why Mr. Ringler says advisory council members should sign confidentiality agreements to safeguard any sensitive material being discussed; in turn, owners should compensate them. Depending on a company’s size and annual earnings, a good benchmark is $500 to $750 per meeting. At the very least, members should be reimbursed for travel or other out-of-pocket expenses, and the Company should pay for costs associated with hosting the meetings. To guarantee the most value, Mr. Ringler suggests quarterly or bi-annual meetings where council members are provided with the necessary materials in advance, including a detailed meeting agenda.

"Setting up an advisory council can be one of the best moves a business makes,” concludes Mr. Ringler. "It enables entrepreneurs to easily and inexpensively gather respected and knowledgeable contacts and utilize their opinions and collective wisdom on a variety of corporate issues to make the business prosper."

About Ringler & Co., PC
Ringler & Co., PC is a Mount Clemens, Michigan-based Certified Public Accounting firm offering accounting, tax, and business advisory services to entrepreneurs and their families. The firm offers a proprietary service called "Unique Processes" targeted to clients’ specific business goals. Established in 1992, Ringler & Co., PC has a history of bringing leadership, direction and clarity to client engagements. Learn more at www.ringlercpa.com.