Across the country, small-business owners are joining advisory boards for straight talk from a jury of their peers
BY NICK ROCKEL

Bleeding Art Industries has built some scary monsters, but none of that prepared co-owner Becky Scott for the hair-raising document she confronted last year. Her Calgary-based company, whose varied work includes prosthetics and creature effects for movies and theatre, had landed a commission to make four exhibits for the city's Creative Kids Museum. Excitement turned to fright as Scott read what amounted to a construction contract from her new client. "There were lien holdbacks, and my partner Leo [Wieser] and I were looking at it and going, 'Oh, my God,'" she recalls.

Luckily, Scott belongs to Powerhouse International Inc., a four-year-old Calgary firm that groups its 250 members into small-business advisory boards for one-year terms. She phoned up former board-mate Keith Pedersen, owner of KBC Electric Ltd., and asked him to walk her and Wieser through the contract. "It was really valuable," says Scott, who was spared a costly visit to her lawyer. "That's a huge resource, to be able to call on these people and go, 'Have you been through this before? Help!'"

Given the stakes, Scott and other Powerhouse members are doing the right thing by leaning on each other. According to Industry Canada, only 47 percent of Canadian companies with fewer than 100 employees make it through year three. Powerhouse president and CEO Taunya Woods Richardson estimates that nine out of 10 Canadian small-business owners don't have an advisory board, usually because they lack the money. And when there is a board, it's often family and friends. "Sometimes they're too involved in the business or they simply don't have the expertise to make effective decisions," Woods Richardson says.

Member-owned Powerhouse runs about 30 boards in Calgary, Vancouver, Edmonton and Kelowna, and plans to expand into Toronto and Ottawa in March. Members-whose companies range in size from one to 28 employees-pay monthly dues of $140. After interviewing new arrivals, Powerhouse assigns them to a board with five peers from non-competing businesses in the same city. Everyone on the board must sign a confidentiality and non-solicitation agreement.

Led by a professional facilitator, the biweekly board meetings have three objectives. First, participants learn to work on their business rather than in it by using a director's manual that contains 26 agendas covering such topics as financial statements and sales and marketing. Second, they must define goals and hold each other accountable for achieving them. Third, each member has an opportunity to discuss everything from partnership issues to cash-flow challenges with a diverse group of entrepreneurs. "This is where the board rallies around that individual to say, 'How are we going to help you through this month?'" Woods Richardson says.

In one case, a Powerhouse board member with a head for numbers was inadvertently sabotaging the growth of his company. Whenever potential major clients approached him, he'd do the math and say no, pleading an inability to support the new business. Rather than accept this argument, Woods Richardson says, the board worked with him to structure the company so that it could sustain a large contract. "That deal catapulted that business into a multimillion-dollar revenue stream versus the $600,000 where he was at."

Michelle Stroo is co-owner of Aegis Group Inc., a Calgary-based company that specializes in workplace health-and-safety solutions. Just starting her third board-her previous one included the principals of a wine-making store, a computer-consulting firm and a picture-framing company-she says Powerhouse has helped her get a handle on human resources. Aegis, which has grown from two to 23 employees in the past four years, hired an HR consultant through one of Stroo's boards. It also recently developed hiring and retention policies. Stroo attributes much of Aegis' rapid expansion to the big-picture thinking encouraged by her fellow board members, who expect her to follow through on any task she sets. "It's hard to go [to a meeting] not having completed it, especially when they have their whips out."

Likewise, two-time board member Becky Scott, whose company augments its five full-time staff with independent contractors, has used Powerhouse input to streamline HR. She remembers how indulgence of a difficult contractor met with disapproval from her previous board. "It forced me to take a look at the fact that I was being too nice, and at what I needed to do as an employer and what processes I needed to put in place to run a better company," Scott admits. During her current board's second quarter, which is devoted to finance, members haven't minced words either. "Frankly, I felt like crying when I got out of the meeting," Scott says of a recent presentation. But she appreciates the tough talk. "It's better to get it from them than to get it from our banker."

Contacts:
Becky Scott, 403-236-0025 www.bleedingartindustries.com
Taunya Woods Richardson, 403-444-6926 www.powerhouseinc.ca
Michelle Stroo [pronounced 'Stroh'], 403-567-1244 www.aegissafety.ca