Business associates are the people who invest in our business, represent our business and have interest in generating profits from our business. They can be business partners, franchisees, investors and channel partners.
One thing that we should be clear right from the beginning is that all business associations are for profit or money. There are situations where we have to choose business partners usually for the lack of fund or the size of the project. Other associations could be with our franchisees or distributors. All of us get associated for the prime motive of generating profits however, we must keep in mind that business associations are like marriages and we must be careful in choosing our associations.
We had discussed earlier about the three things that we have to calculate before starting our business, same rule applies in choosing our associate as well. It is vital to understand whether the business associate has the same level of financial standing as required by the business. Anything over or under may sound trouble in future. We all want to make profit but how do we make it is also important. The profile of the people we get associated with should be checked and compared with our business values and philosophy.
It is imperative that we check the personal, educational and industrial background and experience of our associate matches with our business model. The philosophy, values and principle of the associate should be in sync with our values and philosophy.
Maintaining Interest of Associates
An associate’s interest in our business gets generated and stays when they have invested a reasonable amount of money. The investment as discussed earlier should not be above or under their investing capacity. In case they invest more than they can afford then it becomes a burden for them. Then they might try to find short cuts to recover their money. This could challenge the philosophy of our business. On the other hand, if they have invested below their capacity then they will not care about the money. When they can afford this kind of a loss then they will not have focus on the business.
We had discussed earlier, that it is fear and greed that motivate people to do something. It should be practiced to always sign a detailed contract with the associates standards, that explain our desired vision and way of doing business. This will put fear in them to follow the standards or lose the business opportunity. The insatiability of making profits will keep them going. With due course of time when they follow the standards, it will become a part of their persona and business philosophy. This will put both of us in sync and we would be able to run a business where there will be less contradiction and differences in opinion because all of us will be moving in the same direction.
In addition to investments, contracts and profits, communication plays a major role in building a long lasting relationship. As much as possible the entrepreneur should try to stay in touch with the associate, it should not always be our staff communicating with the associate. Direct communication of the entrepreneur with the associate motivates them and a personal relationship is build. This communication should be initiated by us without waiting for the associate to prompt it. To increase the frequency of communication we can call for regular meetings, informal gatherings, telephone calls, wishing them on occasions and also encourage them to contact us. Taking a personal interest and discussing their issues will motivate the associate and the association will definite last longer.
Another important thing in this association is flexibility and transparency. Although we sign contracts but we should be flexible and should trust the associate if they want to experiment for enhancing the business. This will show them that we trust our associates and believe in them, which in turn will motivate them and give them confidence to innovate in business. Transparency in communication is another important aspect. If we are willing to listen and understand our associates they will feel the confidence to share their business and personal issues with us. This will keep us abreast with what’s happening with our associates. Please remember communication is a two way process what we are taking from them we must give it back to them as well. Little bit of sharing from our side will further egg on our associates, they will start taking the business personally and the feeling of ownership will develop in them as well. If for any reason the association has to be discontinued it should always be done in a congenial manner so that there can be future associations.