Ten excuses for not establishing a board of advisors: these common reasons--from 'I don't think we have enough issues to discuss' to 'I don't want to give up control'--are all misguided.

• Author: Frankenberg, Ellen
• Position: ADVISORY BOARDS

One of the most significant factors determining the survival and success of a closely held company, especially a family business, is the presence of a board of advisors. Yet many such firms lack a board, or have one that meets seldom and contributes little.

Why do very smart entrepreneurs continue to ignore a strategy that promises great long-term payoffs for them and their successors? With apologies to David Letterman, here are their top 10 excuses for not establishing a board of advisors:

10. No one "good enough" will want to serve on my board. Start seeking out advisory board members, and you'll be surprised at the caliber of talent you can attract. When Jay Schindler took over as president of ESKCO, a Dayton, Ohio, firm that provides promotional marketing and corporate packaging solutions, he and his father, Jim Schindler, rethought their requirements for a board. Jim contacted Clay Mathile, who built the lams pet food company into an international brand and sold it to Procter & Gamble Co. Mathile agreed to serve on the ESKCO board and to help the Schindlers restructure it to meet the needs of their growing company. "It was the best thing we could have done for the business," Jay says.

9. I don't want to upstage my current advisors. When you're making decisions about what's best for the business, the focus must be on what is best for the business, not your advisors. An advisory board offers the opportunity to expand your circle of experts beyond your lawyer and your accountant. Strong outside board members can look at your business with fresh, practical eyes (especially if they have already managed companies one step ahead of yours) and improve the bench strength of your management team without expanding your payroll.

8. I have no idea who to choose as board members. Your current network of advisors--bankers, accountants, lawyers, friends, trade associations, your local Chamber of Commerce--can help you build a short list of potential candidates. You and other family members can then interview the top two or three candidates until you reach a business consensus about whom you can trust to serve your business best.

7. I don't have time to work on one more project.

   Board development may not be urgent, but it will save you time and money in the long run. Especially if you're considering passing the business on to the next generation, board development becomes an essential part of that process. As you begin to enjoy the golf links, a strong...