Business

Small businesses: it’s all about relationships

As the business world becomes more complex, a small business owner may no longer be an expert in all the specialized disciplines that a small business needs. Although small business owners must necessarily focus on producing and managing sufficient cash flow and acquiring customers, it is also vitally important for them to cultivate and nurture relationships with a support team. This group includes:

Employees

To the bank

An accountant / tax specialist

A lawyer

An insurance broker

A sales and marketing professional

Employees

Although thinking in terms of a “relationship” with employees may seem a bit strange to a business owner, that relationship could be the most important of all relationships the owner must cultivate. Because good employees represent an important resource in a small business, the time and effort that the owner invests in fostering that relationship pays a great return on investment. Employees who feel seen, respected, and appreciated almost always produce more than expected.

Employees represent – in fact they are – the company to customers. The business relationship with customers is highly dependent on your experience and interaction with employees. Happy employees tend to want to satisfy customers, they want to do a good job, and they want to stay at work. This is important to continued high-quality customer service and avoids the significant expense of employee turnover, employee retraining, and the costly but inevitable “rookie mistakes” from new and inexperienced employees. Additionally, having long-term, trusted employees can free up the owner to handle off-site tasks as needed. Establishing a retirement plan can benefit you and your employees.

A banker

A banking relationship is an obvious necessity, not only for routine commercial banking, but particularly when capital is needed to grow, increase inventory, purchase a building, close a short-term gap between accounts payable and receivable, or to Address the seasonality of cash flow in the business. The banker an owner goes to for a loan must know the business owner, understand the history of the business, and understand the owner’s judgment and credibility regarding the use and prospects for repayment of a loan. If the long-term relationship exists, or is at least under construction, the loan application has a much better chance of being approved. If the business has borrowed and repaid loans in the past, the established track record and relationship greatly improves the prospects for approval. (Loan protection insurance can help with financial difficulties.

Accountant or tax specialist

A relationship with an accountant is equally important for the business owner to have confidence in the quality, clarity, timeliness, and understanding of the financial reports provided. A relationship with an accountant can also enhance the credibility of the business with a banker when the business seeks additional capital.

Many small businesses combine the functions of an accountant and tax specialist in one external entity for reasons of convenience, time savings, and costs. This is fine if the accountant has the necessary tax experience for the industry and the tax experience for the specific business they serve.

Lawyer

Every business owner should have a relationship with a business attorney, liability attorney, or law firm. When an owner invests money and effort in building a business, he must protect himself from losses as a result of a lawsuit.

Insurance broker

As part of business risk management, the company must also have a relationship with and the reliable advice of an insurance broker who will provide optimal coverage in the relevant areas within the limitations of the business budget.

Marketing professional

Depending on the owner’s sales and marketing experience, a relationship with a marketing professional is highly recommended. Most small businesses start with an entrepreneur who has a specific technical skill, a business certification, or has built up a client track for good work done.

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