When I first became an entrepreneur I had the idea that if I just focused on building a successful business – all the “money stuff” would fall in to place. I’d never considered myself great at math. I certainly had no desire to be anything remotely resembling an accountant. And besides – all the other stuff – building a website, getting a great logo, developing products, working on marketing strategies – were all SO much more exciting than financial management. Well, have you ever heard someone say that “money is not the most important thing in life – but it is certainly one of the most impactful things? The reality is that there are many, many ways that ignoring the financial side of your business will come back to haunt you. And one example is in the area of your business relationships.
As an entrepreneur, you are always working to develop strong business relationships – not just with clients – but also with suppliers, service providers and employees. It is important that you not overlook the negative effect that poor financial management can have on each of these relationships, creating a snowball negative effect on the success of your small business.
Your customers no doubt buy from you because they see that you have good products and/or services, offered at a great value. Your ability to continually meet the needs of your customers in terms of price and quality, depends upon the financial strength of your business. Financial organization is also critical in this area. Clients want to feel confident that they are working with a professional. They’ll form lasting judgments based on the efficiency and ease of your billing process, including invoicing, accepting payments and even returns.
Your suppliers are also of course essential to your business. They need to be paid on time per your agreements to that they can cover their needs. An entrepreneur failing to stay on top of the financials will quickly strain supplier relationships making it difficult, if not impossible to remain in business. The same can be said for any service providers you choose to work with. Strong financial organization and planning will help you to determine when you are ready and able to enlist a particular provider. Remember that service providers like accountants, marketing companies, publicists, designers, etc. will also be providing services for individuals who could be wonderful clients for your company. The better your relationship – the more likely they are to provide strong referrals.
Finally, remember that you would be nowhere without the staff and/or regular independent contractors who support you in your business. They rely on their monthly paychecks as much as you rely on them to keep your business running. It can be easy to overlook the business relationships you are developing with your staff, especially if your business is still struggling to be profitable. However, putting your employees first – giving them bonuses and other incentives whenever possible – has the ability to pay you back tenfold.