One thing to think is how many challenges your business faces. Are there enough? In an environment of great political, legislative, economic, social & technological change, success will not come naturally. You need to make important decisions about how you operate your business and what direction it takes. So, where do you get directions from? Here are the three options most used by business owners today.
1. Owners know best – This is where your skills, experience and judgment, as the owner, are relied upon. Many small businesses take this option as the owner is self-sufficient. It is also a more cost effective option, is efficient and gives you more sense of control over the business. Just be careful because this option means that you are limited to your experience and skills, and because you may have a narrow perspective of what is best for your business.
2. Board of Advice or Mentor – Another option is to build a relationship with a mentor or trusted advisor who fulfills the role of Board of Advice (BoA). This mentor acts as a sounding board, providing non0binding advice to the owners without any formal responsibility. People opt for a BoA or Mentor because you can gain access to more diverse experiences and skills, with a broader perspective of your business. This option does require some time and expense and you have to be careful not to let the conversations become social chats.
3. Board of Directors – This is where a small Board of Directors, comprising of the owner(s) and a few external business colleagues.This is a more structured form of guidance, aligned with the principals of the Corporations Act. This is a good option because it will enforce regular formal review of business progress and performance, provide you with access to even more skills and experience, you will have formal records of decisions and more peace of mind for your customers. This does however require more time and additional expense, and it may seem to add complication to the way your business runs.
When considering the structure of your business, make sure you look at all options and select the one that is best suited to you and your business.
If you need any assistance in structuring your business, give The Quinn Group Lawyers a call on 1300 784 667 or submit an online enquiry.