Building business relationships business relationship building

Building business relationships

Business relationship building is highly important. If you spend enough time in the business world, especially private business, you’ll hear quite frequently that money follows management. Let’s face it. There are a lot of people who will promise to make you a fortune only to suddenly vanish along with your precious hard earned dollars.

Building business relationships business relationship buildingSpeaking as a real estate investor, I can tell you that finding financing for your first deal is the hardest thing to do. You’re new. You have little experience. You have no track record. And nobody really knows you yet. The people who will lend to you generally charge predatory interest rates. And everyone else won’t even want to talk to you until you get a couple of deals under your belt.

And this is for good reason. You have to account for your downside. You have to charge more to account for the extra risk you’re taking. Even if the borrower or the investor is honest, they may just be dead wrong about how successful they thought they would be. It happens. And the lender takes even more risk than the borrower many times.

Start Small

One of the best ways for borrowers, lenders, and investors to manage risk is to start small. If you’re a real estate investor, finding a smaller deal requires less risk for your lender, and will put your first deal at less risk. Being 10% wrong on $100,000.00 property is a lot smaller than being 10% wrong on $500,000.00 property. And a small win is still a win. It’s going to build your track record to strengthen relationships and attract new lenders or partners. If you’re the lender, obviously it allows you to test a new investor with less capital at risk. If they can prove to you that they can perform on a small scale, then you can start lending on larger and larger projects.

Even if you’re looking for lending, or partners in some other type of business or investment, testing small before going big has the same effect. Relationships that start slow can survive long enough to keep growing stronger.

Master Your Craft

You don’t have to be a seasoned veteran to be an expert. Business relationship building is not very complicated. Many times a thorough business plan, and detailed due diligence process will impress people you’re trying to meet. Rookie entrepreneurs won’t even have details or plans in place. Being able to talk to people already knowing your industry, your strategies, your risks, your costs, and your process will automatically tell new people that you have a clue about what you’re doing. And many times you will exceed your own expectations when you hold yourself to this standard. If you fall in love with putting in more preparation and learning into what your business is, you will begin to stand out against all the other pseudo-committed amateurs out there.

Share your passion about what it is you do….

If you truly love something, you never shut up about it. And people see that. They assume that you truly understand what you love, and that you’re good at what you love. This can be a good place to start your business relationship building. They even share in your excitement. When you have a strong desire, and you share your mission with other people, don’t be surprised if some of them are willing to rally behind you. Just make it worth their while. Show them how they can gain from trusting in you. Show them how their contribution can help change lives, or change the world. People don’t just want to make money. They want to give back and build a legacy. You can be that opportunity for them.

 

About The Author

herbertkoehler

I am a college drop out who found my passion as an investor. I love the many facets of finance, investing, and business. But even more than that, I love sharing what I learn with others.

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