A study by the Business Development Bank of Canada (BDC) released today in Winnipeg shows small and medium sized businesses that implement advisory boards benefit from a significant impact on the business’s financial performance.
The survey — the first of its kind qualifying and quantifying the use of advisory boards — showed only six per cent of Canadian small and medium-sized businesses use an advisory board.
But the study showed for those that do, there is good results for the companies.
For instance, sales grew 67 per cent on average in the three years after companies created an advisory board, almost triple the 23 per cent rate of the previous three years; productivity rose six per cent in the three years after, double the three per cent rate in the previous three years; and from 2001-2011, average annual sales of businesses with an advisory board were 24 per cent higher than those of a control group of other businesses, while productivity was 18 per cent higher.
"The benefits of having good-quality, independent advice from well-respected, experienced individuals is clear, and we now have research to support it," says Jean-René Halde, BDC’s President and Chief Executive Officer. "We have to encourage more entrepreneurs to use an advisory board so that we can grow the numbers that have one."