Who Should You Grow Your Business Relationships With?
We spoke with Jon Bebe, who is a fiduciary who works with small businesses and the founder of Collaborative Financial Group, about seven small business relationships that all owners should cherish.
#1 – Financial Advisor
Finances can be particularly complicated for business owners, especially since they’re not receiving a steady, predictable paycheck every two weeks. On top of that, they’re facing unique financial decisions, like determining how much of their profits should be reinvested back into the business and which type of retirement accounts they should set up for themselves.
Financial advisors who have experience working with small businesses can be incredible assets, even though their services will cost money the business owners are trying to save. As Bebe explained, you don’t want to “learn on the fly something that a professional has spent years refining.” Handing off some of the work frees up your time to focus on revenue-generating tasks for the businesses.
But when it comes to picking a financial advisor, make sure they’re also a fiduciary. A fiduciary is someone who manages money on behalf of someone else but is also required to act on a client’s best interest, regardless of compensation.
“A trusted financial advisor should always have the clients’ best interests first and foremost,” Bebe said. “Fiduciaries are held to the highest standard in the industry and thus are exposed to the must scrutiny.”
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If you’re looking for an advisor, you can ask for recommendations or search reputable databases like The National Association of Personal Financial Advisors (NAPFA) or the Financial Planning Association.
#2 – Accountant or CPA
“The relationship between a business owner and their tax professional is one of the most important trust relationships that the owner can have,” said Bebe. These individuals will help you prepare your taxes (and can help you find tax breaks!), but they can also offer advice on the structure of your business, retirement plans and other financial goals.
Tip: Try to find a CPA that offers a flat-rate fee to handle tax preparation along with quarterly projections; they’ll typically be available to answer questions as you go instead of charging you hourly.
#3 – Mentor
Even if you have years of experience working in an industry, running your own business is a challenge. Finding someone who has already faced and overcome many of your challenges can help you avoid common pitfalls. If you can find someone with experience in your specific industry, that’s even better.
“Experience, success, and failure are measured very differently in the apparel industry versus a craft coffee brick-and-mortar,” said Bebe. “While it is good to have a well-rounded team of consultants, a chosen mentor should understand the ebb and flow of the small business that the owner is hoping to thrive in.”
SCORE is an organization that connects mentors who volunteer their time with small business owners. You can also try to establish a relationship with former bosses or coworkers, or with established business leaders in your community.
#4 – Lawyer
There’s a lot of legal information to sort through when you’re starting a business, including deciding what business structures best protect your assets, having the right business licenses in place (which will vary by location and industry) and setting up legally binding contracts.
“A strong contract will protect the owner from legal action and often financial repercussions,” Bebe explained when detailing the importance of legal counsel. Every industry has its own unique legal considerations, he added, including intellectual property rights, trademarking, employee law, and human resource issues.
You don’t necessarily need to have a lawyer on retainer but have a strong relationship with a local attorney who you can call or email for counsel when needed. They’ll be crucial while you set up and scale your business, but you want to find someone who will be available long term
#5 – Lenders or investors
Some small businesses have low overhead, but there are plenty that require much more capital to get started. In these cases, finding a lender or an investor to help you get that initial funding is essential.
If you’re just getting started and looking to establish a connection, consider local options like neighborhood credit unions or banks. Smaller institutions in your area have insight into the current local market, plus they often have more discretion over lending decisions than big, nationwide banks.
Investors may be harder to come by, but if you find someone who believes in your product, they may also offer additional advice, resources, connections, or mentoring in exchange for a share of your profits.
#6 – Vendors
There are a large number of businesses who are heavily dependent on vendors. A restaurant owner can’t make great dishes without having the ingredients from their vendor in stock, for example, and the average business may struggle to attract new clients if the marketing agency they’ve hired doesn’t do their job well.
Bebe suggested opting for like-minded vendors who have industry experience and share your business values. “Often times, the small business owner looks only at the dollar cost and not the value that the vendor can add to the business,” he said. “It is worth paying more to get better service and a solid relationship with a vendor.”
Ask peers in your industry or your mentor for recommendations, and make sure to read reviews online to help you find reliable, high-quality vendors that you know you can count on.
#7 – Customers
As a business owner, you already know your customers and clients are key to your success, so don’t forget to show them some love! Consider hosting customer appreciation activities throughout the year (holidays are always a great place to start) or offering long-time supporters early or discounted access to certain products and events.
To engage with your customers, you can request feedback or send online surveys, so they know their input is important to you. After all, communication is the key to any successful relationship.