Entrepreneurship

Why form
a consultative
committee for
your growing
SMB?

The author of this article, Jean-Philippe L’Écuyer, is a startup business coach. In the last 10 years, he has helped more than 250 entrepreneurs get their start in business and has raised more than $4.5M in startup financing for his clients. He founded the Vision et Mission blog on starting up a business to further help entrepreneurs to start a business. The holder of a Master's degree in management sciences, he is currently completing his certified coach accreditation with the International Coach Federation.

Growing SMBs face complex challenges that cause entrepreneurs to rack their brains. Constantly at a crossroads, these businesses must deal with strategic decisions more and more frequently.

The entrepreneurs at the head of these SMBs are primarily preoccupied by:

1. Recruiting and retaining staff.
2. Developing a consistent digital strategy.
3. Measuring the performance of their sales team.
4. Optimizing their manufacturing and distribution processes.
5. Developing strategic partnerships for their business.

To meet these growth challenges and make informed decisions, more and more entrepreneurs are turning to consultative committees. These committees have a positive impact on growing SMBs, because they facilitate strategic decision-making. This makes the consultative committee a valuable tool for an SMB that wants to take its business to the next level.

What is a consultative committee?

A consultative committee is a focus group which facilitates strategic decision-making for a growing SMB. The members of a committee have complementary and interdisciplinary profiles. Members include seasoned entrepreneurs, technical and sector-based experts, and managers.

For the greater benefit of the entrepreneur, the members of a consultative committee generally agree to offer their contribution graciously. This means that it is volunteers who share their knowledge and know-how. They want to help a business to develop, thereby contributing to economic development.

In general, the members of a consultative committee meet between four and twelve times per year. These meetings last from two to five hours, depending on the need.

A consultative committee’s agenda may include one or more subjects, based on the needs expressed by the entrepreneur. In periods of crisis, the committee members focus all attention on the issue that is causing a problem at that time.

Like its name indicates, the consultative committee does not have any decision-making power, but rather a consultative power. The entrepreneur remains the decision-maker for the development of his SMB. He is responsible for all decisions he makes.

What are the benefits for the SMB?

A consultative committee is the ideal place to reflect on the strategic aspects of a growing business. It is the opportunity for the entrepreneur to be supported and advised in his decision-making.

It has been demonstrated that SMBs that have a consultative committee tend to get more easily involved in innovative growth projects. Entrepreneurs at the head of these SMBs are better advised than the average entrepreneur in terms of the challenges they face in their industry. They have a better understanding of the issues that their business faces and they more easily anticipate the impact of their decisions. Therefore, SMBs that have a consultative committee make better progress in their growth and improve their competitiveness.

To be more specific: Businesses that implement a consultative committee generally see their productivity double in the short term. Thereafter, their productivity is generally 20% higher than that of their industry competitors.

It has also been observed that SMBs that have a consultative committee perform better from a marketing and business development standpoint. Their sales are generally 24% higher than their industry average.

Finally, another important point is that consultative committees also have a positive impact on the entrepreneur who heads the SMB. Having a consultative committee frees him from the feeling of having to decide everything alone. Since it enables the entrepreneur to validate his strategic decisions, the consultative committee plays a moral and psychological support role with the entrepreneur. This is a significant role.

The positive effects of a consultative committee have been proven time and time again. SMBs that choose to implement one benefit strongly from it.

How to create a consultative committee?

Despite all the benefits that entrepreneurs can get from a consultative committee, there are still too few entrepreneurs who are willing to try it. Less than 6% of entrepreneurs set up their own consultative committee.

This low consultative committee creation rate is explained by the difficulty of this approach. Implementing a consultative committee is a demanding process. An entrepreneur who commits to one must devote a great deal of time and effort. Entrepreneurs who choose to fully commit themselves to this process go through a few major steps:

The first step consists in drawing up a list of the business’s needs. This involves finding the main strategic challenges that it faces, to better orient the recruiting of members of the future committee.

It is then possible to reflect on the desired profile for each member of the committee to be implemented. To this end, it is important to vary the areas of expertise and experience and, above all, focus on the interdisciplinary capacities of each member. This means that each member will have to take an interest in all areas and make their contribution while not losing sight of the strategic issue concerned.

In the great majority of cases, the members of a consultative committee are recruited from the entrepreneur’s network. Therefore, the members who voluntarily invest in a consultative committee often know the entrepreneur, directly or indirectly.

The next step is for the entrepreneur to search through his network of contacts to draw up a preliminary list of potential members for the future committee. Obviously this list will not be final, but it will be an excellent starting point to open the discussion with potential members. As one thing leads to another, the list of potential members will grow, the needs will become more precise and a final selection will gradually take place.

The entrepreneur will then have to implement the new consultative committee and get it up and running. These two steps can take a certain amount of time, which is perfectly normal. Most of the time, this is the first experience of this kind for the entrepreneur and the founding members of the consultative committee. Therefore, there is learning to do on both sides to ensure that the exercise becomes fully profitable.

To found or not to found a consultative committee

There is no doubt that implementing a consultative committee is a profitable exercise for an SMB. That said, it is important to ask yourself the right questions before committing to this approach.

The entrepreneur who chooses to found a consultative committee will have to devote time and energy in it that unfortunately cannot be invested elsewhere. He must therefore make sure that the time has indeed come to found his own consultative committee and that it is worth the effort.

It is quite possible that a consultative committee is not suitable for your specific SMB. If your growth is on track and strategic decisions are made with little effort, you probably don’t need a consultative committee. It is also possible that it is simply too early to implement such a committee in your business. Consultative committees are meant for businesses that have reached a certain maturity.

In all cases, keep in mind that this tool exists and that it has proven its worth. When you need help from a strategic standpoint, this tool could be ideal to favour the growth of your SMB.

About Vision et Mission.

Vision et Mission is a blog on starting up a business. It offers advice, tools and tips to successfully start up a business. This blog also highlights entrepreneurs who have successfully started up their own business. All content is offered free. To learn more, visit Vision et Mission.