Why Businesses Need Boards

I know the timing is different, but I'm gonna be on a flight. So we had so many questions. I'm so grateful that all of you are so interested in all the stuff about boards. You all, like, looked at my posts and sent in your stuff, and boards are so important. So I'm really happy to have this series because it's been such an interesting journey for me to be on a board, to learn about different boards, to help in my family business board, to take what I learned from there and apply it here and what I learned from here and apply it there. And so today we wanted to talk about why businesses need boards. So I'm gonna dive right in. I'm hoping you did your weekly reflections. We've had a lot of public holidays in Uganda and these long weekends, people tend to, like, work less or do other things. But be proactive in what you're doing. Just because it's a long weekend doesn't mean you should just sleep. If you need the rest, rest. But, like, think about what you actually want to do with your time. Make sure you reflected on how the week went. Even if it was a shorter week or a different kind of week, it's still a week in your life that you're never gonna get back. So make sure you're aware, you're measuring, you're reflecting. You know what works, what didn't work, what your wins were. Let's dive into why businesses need boards. Because I had to get off in, like, 10 minutes. So a business needs a board because you as an entrepreneur, even if you're a team of entrepreneurs, even if you're founders, you can't know everything and you don't see your own blind spots. So one of the first things to think about a board is, is about accountability. So they can tell you, have you done this? Have you done this? Have you moved forward? What are the targets? What are the goals? Show us what you're actually doing. That's why you have to trust your board. Show them your financials, tell them your challenges. Say, we need this. We're struggling with this. They're there to help you. So a board is like a support system for a business. They are mirror. You can bounce ideas off them. They have advice because they have more experience than you. They have a huge network because you now have access to all the people that they know and they have established in their career. It's very supportive and helpful to know that someone has your back. An entrepreneur is a very lonely job. Calling like, you don't have a supervisor you don't have, like, a team in the same sort of way. So you don't really have someone to go to and turn to. So think of your board like a professional mentor for the business. Those are the different people that you choose, are there to support your business. They have your best interests at heart. So even when your business is small, even when you can't afford to pay, your board have people that you talk to about your stuff. Because sometimes I've actually seen this with a lot of entrepreneurs. We get. You get, like, stuck in your own head. You're scared to tell anyone what your business idea is because you think they'll copy it. You don't want to get advice from anyone. You don't listen to anyone. So you keep doing the same thing. And you wonder why things are not working, why you have the same sort of problems, why it's not growing fast enough, why your staff keep doing this. Because you're working in silo. No man is an island. We all need other people. We can all benefit from feedback, from criticism, from advice, from ideas. So it helps if you have a trusted group of people that you can say that stuff to. Even if you don't formally ask them to be a board, say you still have your small business and it's not even legal. It's not big. Just have your few friends or your few mentors who you tell about your business ideas. Right now, I'm trying to expand one of my business ideas, and I don't have a board for it yet, but I have certain people that I keep asking, can we go for coffee? Can I, like, bounce this idea of you? Tell me what you think about this. What's your opinion? Because I want to see all the blind spots that I don't see. I want their advice, their experience, their network, their ideas, their criticism. So I know, am I moving in the right direction? Just because I have an idea doesn't mean I'm right or I know everything. So think of a board like that. They are your support system. They're there to help guide you. They're not there to antagonize you, to copy your business, to lie to you, to put you under pressure. They're there to support you in a formal, professional way, holding you accountable, introducing you to their networks, giving you advice, giving you criticism, giving you feedback, helping you raise money, helping you find customers. Your board is your support system. So think about it like that. It's like a mentor for your business, and that's why you need them. So the sooner you get Aboard the better. Even if it's not a formal board, have the people that you talk to about these things because they can help you, they can advise you, they can guide you. Sometimes they can just encourage you. It's helpful. And also when you're explaining your idea or the challenges in your business, having someone who understands it and gets it, you explain better and even helps your mind work things out better. So I really encourage a board. When your business gets to the stage where you need a formal board, like companies that grow to a certain stage, that have a certain amount of turnover, that need a certain amount of oversight, that's where you need like a formal board. That's when you have to have contracts and you have. You move from an advisory board to like an executive board, like properly, where everything is legal and there's responsibilities. But that's why it helps to start with small, informal boards. So you also get used to the practice, to the way that things run on boards. I will keep releasing videos about boards for the rest of this month, so stay tuned if you want more information. And I will keep doing the live, so keep sending me your questions. Let's go to some questions. Thank you. I'm doing a business at a startup stage, but I'm requesting how to select a good board which will be able to manage and help the business grow. Think of a board how you think of mentors. So try and get people with more experience than you and try and get people who are diverse. So not people exactly like you, not people with your background, your skills, your area of expertise. Boards need to have different people from different backgrounds professionally, like a legal person, a finance person, HR person, marketing person. So get people who are coming from different walks of life professionally because they'll all be able to give you different advice and different introductions and different criticism that's going to be useful to your board. So make sure they have lots of experience. So sometimes it's not good to have your friends. A board is not something to just take a box. Let me just put these people's names. Even if they're not going to add value, make sure it's people you respect, people who have more experience than you and people who are in different fields. Thank you for everything you're doing. Oh, my pleasure. Do businesses in growth stage need a board because a board because, for starters, having a board needs finances to hire experts to come and work with you. Yet growth stage, every business makes less or no profit. Not all boards are paid. There's boards where you the people are doing it out of the kindness of their heart, they're giving you their time and their energy. So I think at a growth stage, a business needs a board even more. One, their network is huge. They're going to help you if they talk about their boards and then also they're going to give you really good advice. That's when you need advice the most. Because when you're cash strapped, you don't have as much money or resources. You don't know where should I put the money? Do I have more people? Do I put more Facebook ads? Do I put a billboard? Do I get another finance person? Do I put it in stock? What are you doing with your resources? Where are you spending your time? It's so useful to have people who can advise you well at that stage, they'll help your business grow in a sustainable way. They'll help you scale, they'll help you make fewer mistakes. Because they walked further in life than you, they have that experience. So growth stage, you need a board, Michael? Yes, I'm open to questions related in board activities. Difference between civilian boards versus government boards. Okay, that's interesting. So I'm on both types of boards. Government boards, I feel like you have an extra layer of regulation because you also have government regulation and police policies to deal with. And civilian boards, you only have the law like the way things are supposed to be. But government boards also have government policy. Like for example, procurement in government is completely different from procurement in private sector. Procurement in government takes like 10 times longer. Sometimes on the board I'll be like, where is this? Where's the update for this? They're like, we're working on it, Madame. We've submitted that this, we've done this. Now it goes to ur something like, there's a whole system for every tiny thing that our government organization has to go through. So procurement can take like six months. Whereas in the private sector I can just call suppliers and make a decision today, like as a manager in a company. So there's a lot of extra layer of regulation that happens. I have to go. Next question. In passive income businesses, do you need a board? Interesting. I would say you don't need a formal board, but it would help to have an advisory board or a personal board. A personal board is people in your life who help you with your own decisions. So if you have investment somewhere, I would say find people who understand those investments or have experience in those investments, like a mentor and also talk to them about it. Because even like cattle business, the example you're giving it changes. There's growth, there's differences, different ways to do it, there's different options. So however you're going to get information because like we said, aboard is a support system. So however, you're going to get more information to help you make better decisions, to make more money, to be more happy with what, whatever your business is, it helps. Anina. I hope I've answered that some. Sam, when does an entrepreneur or business know they need a board? Such idea stage or when sales flow? How early is a board needed and who should be on the board? Should they be paid? Not all board members have to be paid, but it needs to be fair. So don't pay some and don't pay others. You should always have like a formal way. You ask someone to be on a board and you make it clear upfront, we will meet this many times a year. This is what we require of you. This is how you. We will thank you. Sometimes not about money. You can give them stuff in kind like, like you give them a discount or T shirts or all the snacks at the board meetings. Be complimentary. You figure it out, how to thank people in your own way. And the board knows you and they support you, so they don't want to drain the resources of the company. I would not have a board at the idea stage. At the idea stage, you need research. So you should be talking to way more people than the people you have on a board. You need to be getting as much information as you can. Once, once you have customers, once you're growing, once you have some results, that's when you start thinking about a board and tell them, so this is how far we've gone. We've been operational for six months. We've sold this much, we've made this much. This is where we're moving now. Can you start to advise me on this? Because it doesn't help for you to just take your idea to someone and keep asking them for help when you're not actually moving. So be action oriented. Next question. Let's say I have a business, I have started, what stage of its growth? Okay, we answered that. Is it good of a business that only has a profit of 2 million per month after taxes to have a board, what number of members at least also advise me that benefits of this level of business could extend to the board to keep it running? Good question. So I think that's enough revenue that you should have a board, not like a formal board where you have contracts and responsibilities and you're paying them, but an advisory board so they can help you to grow members. You should have. Usually boards have an odd number of people so that you can never get stuck in a vote. So at least five, maybe, if you're starting, maybe have three. So to start small, and you have three different people and you can meet with them once every three months, once every six months, invite them somewhere where you have a boardroom or like some coffee and tea, and you can, like, talk about things, the benefits that they can to help them keep running. One, be a good entrepreneur. It's like how we talk about being a good mentee. When you have a mentor, you don't want them always following you up, chasing you, looking for you, paying for the drinks and coffees and teas. You also have to take initiative to be good at it. So if you have a small company and now you have these three people advising you, make sure you keep them informed. You send them updates, you include them in activities so that they feel the, the spirit of it. When you don't have finances to pay someone, you have to find other ways to keep them encouraged and motivated. And by the time someone has agreed to be on your board or your advisory board or they're helping you, it's because they care. They want to give you that time, that energy. So respect that, appreciate them, and make sure you go forward with that. I come. Okay, I have to go. I'll answer these questions.