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Friends in Business

Kim Radok11 July 2013

FRIENDS IN BUSINESS

Money has the ability to corrupt all human behaviour, even amongst friends.

Nowhere do we see this corrupting behaviour more so than in a business setting. It is as though when dealing with others in business, some people believe they have every right to steal another person's money. This attitude includes stealing from friends in business and is acceptable - well, because it is business and not really personal. However as many would testify, stealing from others in business is not fair.

Doing business with friends is often is a double edged sword.  We wish to establish a "friendly business relationship" with our friends or new business acquaintances on the belief they will pay us within our terms of trade better than other people. Alas we find in time, our same "friends" which we have so carefully cultivated, turn out to be like everybody else. They slow pay at every opportunity, tell lies about when they will pay and turn out to be so like all those other business people who don't pay their accounts.

So how does this all relate to Kurt's blog and this blog?

I believe we can make "friends" with people in business and get paid for our goods and services in a timely manner if we follow normal commercial rules of business. However as Kurt correctly identifies, we also need to understand the definition of "friends in business".

So let us revisit Kurt's definition of a "friend in business" which is:

A person (or company) who is trustworthy

A person (or company) who is respected

A person (or company) who has a solid reputation for their market niche

A person (or company) who appears co-operative with friendly help/advice

A person (or company) who listens to the concerns, fears, anxieties, needs of their customer (and supplier) and offers worthwhile, meaningful guidance

Note: the (or company and supplier) are my add-ins to the above criteria.

If you think this is some sort of fairy tale wish list of how business should be, you are wrong. The truth is, within these definitions is the genesis of a good business trading relationship. Irrespective of whether you are a supplier or buyer, these are the guidelines which are worth reviewing if you wish to do "good business". In fact, they are the basis of all our Terms of Trade included in a professionally developed commercial Credit Application.

So let us look at these definitions and see how they apply in a complete business arrangement.

A person (or company) who is trustworthy - In business a trustworthy customer or supplier is worth dollars. If the other party does as they say, both parties are able to operate efficiently. We know that efficiency saves dollars.

A person (or company) who is respected -  A supplier or customer adds value to the other's business via association. That is why we note both sellers and customers seek products of one supplier over their competitors.

A person (or company) who has a solid reputation for their market niche - Refer to the above as a solid reputation for business wins "friends" whilst a poor reputation can drive you out of business or make it more expensive to operate.

A person (or company) who appears co-operative with friendly help/advice - Problems will always arise from time to time in business. When the supplier or customer has a problem with the other, both parties can "win" when these problems are resolved through negotiation and goodwill. Collaboration between suppliers and customers is a recognised operating formula which brings benefits to both parties.

A person (or company) who listens to the concerns, fears, anxieties, needs of their customer (and supplier) and offers worthwhile, meaningful guidance - Being successful in business sometimes means working with your suppliers and customers to achieve common goals. Business does not always have to be  adversarial or with the aim of taking advantage of another business by fair means or foul.

In conclusion, I respectively suggest that acting friendly in business is not just about being naive or looking for a business fairy tale scenario. It is also about being smart. As Kurt's definition of "friends in business" suggests, you need to define what a "friend" is and then be aware of how money may influence your business friend's behaviour.

May you be paid today rather than tomorrow

Kim Radok

kim@creditmatters.com.au

www.creditmatters.com.au

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