By Mike Kappel
Whether you’re thinking of starting a business or currently own a business, you need to work on relationship building. If you’ve ever heard the phrase, “It’s all about who you know,” then you might understand what I’m talking about. There are five types of business relationships you need to develop when you’re an entrepreneur.
I’ve been a business owner for over 30 years. Without certain types of business relationships, I would not be where I am today.
Types of business relationships you need
Even though you’re busier than all get out, you need to develop and maintain both personal and professional relationships. Your business relationships will carry you through the ups and downs of ownership. And, they will help you grow your business.
Take a look at the five most important types of business relationships you need as an entrepreneur:
Customers can make or break your business. If a customer is dissatisfied, they can spread the word like wildfire, convincing anyone who will listen that they should avoid your business. But, when you work on building business relationships with customers, you develop a loyal following. Trust me, customer satisfaction is something you don’t want to take lightly.
Having a business relationship with customers means addressing any questions or complaints they have, exceeding expectations, showing your appreciation for their patronage, asking for feedback, and thinking of new ideas to keep them coming back.
You need employees who work hard to help grow your business. Relationship building with the people you work with is one of the most important parts of owning a business.
Employees are a major asset to a company. If you want to keep your employees, you need to show you appreciate them. Since I work side-by-side with my employees each day, I actually call them my co-workers. Heck, I spend so much time with my employees that they’re like family to me.
Don’t take advantage of your employees. Show your appreciation for their hard work, respond positively to good ideas, and develop trust. I cannot put enough emphasis on the importance of teamwork in an organization.
3. Lenders and investors
Maintain the relationships you have with your business’s lenders and investors. Not only do lenders loan you the money you need to start your business, they can also provide loans for growing your business.
Building business relationships with investors is equally important. There are a few types of investors you might have at your business. You could have an angel investor, peer, venture capitalist, or even a family member invest in your company. Keep a relationship going with those willing to put money into your business ideas. Both your lenders and investors can provide insight into your finances.
You might think that you want nothing to do with your competitors because they’re … well, competitors. You may have even conducted a market analysis, and invested hours into figuring out how to outperform the other players in your industry. In reality, you need to develop some sort of relationship with the competition to be successful.
As I was beginning my second startup company in 1988, I called and introduced myself to the two major competitors in that market. One competitor had been around for 20 years, and the other had been in business for a whopping 40 years! I introduced myself as a friendly competitor.
I was able to build a mutually-beneficial relationship with both competitors that has lasted to this day. Throughout the years, these two competitors had different seasons when there was a lull in their sales, and I easily could have taken advantage of those situations. But, I refused to do that. I like competing, but I don’t like playing dirty.
Developing relationships with competitors can really help you succeed in your business. Competition keeps you on your toes, opens doors for you, and teaches you about the industry.
Last but not least, developing a business relationship with vendors and suppliers can really aid your company. Reliable suppliers ensure your business needs are met. You can get competitive prices, quality products, and on-time orders if you maintain your business relationships.
If your suppliers come to know you as a trustworthy businessperson who always pays, they might be more understanding if you face small business cash flow problems and can’t pay right away. Instead of requiring you to pay a large sum upfront, suppliers can develop a payment plan.
Mike Kappel is a serial entrepreneur, and the founder and CEO of Patriot Software Company, and its subsidiaries. Patriot Software, LLC is a developer of online payroll and accounting software for U.S. small-business owners. Connect on Twitter: @PatriotSoftware.