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Business life lesson - relationships drive businesses

By CA ⋅ May 6, 2007 ⋅ Email This Post ⋅ Post a comment

Dave Prouhet at Business Advice Daily tagged me for My Business Life Lessons. This is going to be a ten part series. For links to the rest of the series see the bottom of the post. Here is my second business lesson:

Relationships drive your business. Nurture them and your business has a fighting chance. The key to your long-term success is your ability to connect with other people.

Anyone who has been in sales and marketing will attest (privately or publicly) that relationships are what make them successful. “People buy people!” No matter how good a salesperson s/he is, if they do not build a relationship they do not have a client. Entrepreneurs know that too. Recollect how you got your first sale - your first customer. How was your relationship with that individual? I wrote a post about relationships earlier. You can read it here.

Relationships and Networking

Relationships and networking go hand in hand. Networking is the cause and relationships is the effect. You can associate with your peers at the local chamber of commerce, regional economic development agency, attending trade shows, conferences, seminars and other networking events. But you have to remember - as you sow, so will you reap! Your networking objective must be to build a long term relationship rather than the short term gain of the next sale. You need to give back what you receive.

Your small business may not have the financial muscle to have a large marketing campaign. Did you realize your clients, your suppliers, vendors and financers are your network too? How often do you meet with them? They can be a great marketing source once they trust you to be professional, credible and reliable. Word of mouth marketing is not dead it. The tools to facilitate word-of-mouth marketing have just expanded to include the Web 2.0. Use it.

Relationships and Contracts

At one end of the spectrum, I have met a number of businesses who just do not believe in contracts. Their business deals hinge on a hand-shake. I am not talking about a couple of thousand dollars: I am talking about upwards of half a million. Then there are others who will not budge an inch without a signed, sealed and delivered contract. Both these approaches are risky and can undermine relationships.

Trust is an important ingredient in relationships. But as a legal entity, you have to protect your firm’s assets. But remember; a contract is only good if both parties have the intention of adhering to the terms and conditions. If either one or more of the parties to the contract do not intend to honor the contract, it is just a piece of paper. In this case, the relationship is the cause while the contract is the effect. Focusing on Other articles in this series: