Relationships are the keys to most successful businesses. The more obvious relationships are those you hold with your customers and your employees. The less obvious relationships are those you hold with the other businesses and professionals that provide you and your business with important services, such as bankers, attorneys, accountants, and technology providers. In larger businesses, these disciplines and services are often provided through in-house dedicated departments, because they are so essential. In smaller businesses, this group is most often not leveraged properly and therefore never develops into a relationship that maximizes the value for your business. Yes, your CPA can do more than just prepare your annual tax returns, and your local Banker does more than loan money. There is a possibility you are not asking the right questions, or avoiding the questions altogether.
So, what if you began to think of each of these providers as essential departments within your business, all working as strategic partners towards a common set of goals? To work, all participants in the relationship must be engaged and working towards the same results. You have to be as involved as your strategic partners, and that means taking responsibility for your part and holding your partners accountable for theirs.
As you read on, begin to think about the service businesses you utilize and how you can leverage them in a more value driven way. You will also see some of the less common, yet high value services available in the marketplace.
- Accountants - How do you view your accountant? Are they the knight in shining armor or the necessary evil that serves as a firewall between you and the IRS? A good accountant can make an enormous difference for a business. Their expertise lies in more than just preparing the year end taxes for the business. They can provide valuable strategic planning advice, strategies for protecting your money and increasing your cash flow, maximizing profit, and identifying opportunities for lowering the tax burden of your business, just to name a few. A Certified Public Accountant should have the skills and knowledge that your business can leverage, but do not take the designation at face value. Ask questions. Interview them as you would a candidate for employment, and ask them to provide you with client referrals. This person or firm will be a key cog in your professional support structure. You need to ensure they are a fit for your business and the businesses long term goals, and that they are willing to have the right conversations with you about your business.
- Bankers - The thought of dealing with banks and bankers can make even the toughest of business owners' tremble in fear. Realize that the banks need you as much as you need them. They operate on the same premise that you do: maximize profit and cash flow. There are a number of services that banks offer, other than loans, which can be utilized to create efficiencies in your business. Some of these may include operating lines of credit, accounts receivable programs, computerized cash management and bill payment systems, or payroll programs. Call and set an appointment to discuss how the bank can help your business. Don't be timid about what you need and want for your business. The bank, and its employees, is there to help you achieve your goals. If it does not live up to your expectations, maybe it is time to find a new bank.
- Insurance Companies/Agents - Your business has to have insurance to operate. The fact that your insurance agent is trying to sell you something should not prevent you from taking his or her call. Embrace her call and leverage her expertise to the advantage of your business. Certainly, you want the best rate possible, but make the relationship about the value you receive, not money you pay. An agent invested in the success of your business is responsive to your requests and proactive in their service. Collaborate with your agent, schedule and keep regular appointments, utilize their knowledge to ensure that your business is insured properly.
- Other Professional Services - There are a multitude of other areas where professional service can be leveraged to help to create efficiencies in your business. A few are as follows:
- Business Coaches
- IT
- Human Resources
- Payroll
- Advertising
- Property Management
- Attorneys
An example of leveraging your professional relationships: A client recently decided it was time to change insurance agents because their agent was unresponsive and could not get the results they were looking for. As a result, they leveraged their relationship with their CPA to find a new insurance agent that came highly recommended. The client then interviewed the agent and explained their current insurance needs and coverage, but more importantly what they were looking for in an agent. The new agent has been incredibly responsive and has also brought great value by reviewing the current coverage and identifying areas where the coverage was dangerously lacking, exposing the business to potential liabilities.
Each type of business mentioned above is a vendor, interested in making a profit for their own business, just like you. And they will try and sell you their services. They have to; otherwise they can't show you where the value in their service lies. This is your opportunity to turn the conversation into the right kind of productive interview that will leverage the opportunity into a win/win scenario for your business and theirs. The example in the paragraph above is an excellent illustration of a win/win scenario. The business owner got what they needed and the insurance agent now has a new client.
Henry R. Luce, founder of Time, Life, Sports Illustrated, and Fortune magazines, once said, "Business, more than any other occupation, is a continual dealing with the future; it is a continual calculation, an instinctive exercise in foresight." As we move forward this month, we will continue to explore how these services can be strategic partners, coordinating their efforts with yours to reach the vision you have for your business.
In the mean time we'd love to hear your experiences with strategic partners. Please respond to this email or comment on our Facebook or LinkedIn pages!
