By Vivian Giang
Too many small-business owners make the mistake of thinking they can do it alone when, in fact, it’s critical for them to form sustaining relationships as their businesses grow.
The way you interact and relate to others is crucial when it comes to building a trusting, solid foundation for your organization, Alan S. Berson and Richard G. Stieglitz say in their book Leadership Conversations.
“[Business owners] think, ‘I don’t have time for relationships. I need to make quick decisions and get things in order,'” Berson tells us, adding that’s actually one of the biggest mistakes business owners can make. “Relationships are the foundation of everything you are trying to achieve.”
As your business grows and responsibilities increase, your relationships with customers, suppliers, competitors, industry leaders, financiers and professional advisers should also grow. In their book, the authors point out four different types of professional relationships that are crucial for success: Targeted, Tentative, Transactional and Trusted relationships.
“You need to think of these relationships as a way to keep things going,” Berson says. “If you wait until you need them, it’ll be too late.”
Here are the four relationships you must have as a business owner:
1. Targeted Relationships
These are the people you don’t know but who are in the same industry as you—either as peers or competitors. It’s worthwhile targeting and connecting with them, because “you will benefit from what they offer and they will benefit from knowing you.”
Targeted relationships don’t feel real because you don’t actually know these people personally; maybe you connect with them on LinkedIn or quickly exchanged business cards at an event. You can’t depend on these people yet, but if you work on these relationships, these people can be crucial to you in the future. If you target the right people, you’ll know exactly who to turn to if the industry or market ever changes.
2. Tentative Relationships
Before you can ask someone to do something for you, you have to form some kind of relationship with him or her. If you’ve spoken briefly to someone at a conference or a networking event, that relationship is a tentative one. You might not truly know these people yet, but you know them enough to email them for a small favor or to ask them if they would be interested in getting involved in your new project.
Tentative relationships are different from your targeted ones because you actually speak or meet up with these people at least semi-regularly for coffee or lunch. You see your relationship with them growing, and you put effort into getting to know one another better. These people can benefit your company: For example, if you need to know where to get certain supplies, these people can help connect you with the right people. If they are experts in their industries, they can advise you on different business decisions.
3. Transactional Relationships
These types of relationships are less personal and typically used by managers to accomplish specific business objectives. “They are defined by what each party can do for the other to reach near-term objectives, seldom extended into career or personal areas,” Berson and Stieglitz write. For example, relationships with customers, peers or suppliers are often transactional relationships.
“Transactional relationship partners trust and respect each other because they frequently work together and consistently treat each other fairly,” the authors explain. “These relationships develop with go-to people whom you can count on to get the job done. Likewise, they trust that you will meet your end of the bargain.”
4. Trusted Relationships
These are the most personal, valuable and often the “longest-lasting” relationships out of all of these. The conversations that you have with these people are usually related to long-term plans.
These people are your mentors and close peers at work. This kind of relationship also needs to exist between senior executives and partners in different organizations. Business deals need to be crafted through trusted relationships. To create a trusted relationship, you need to have had many interactions with one another that have gone well. At the beginning of these trusted relationships, you should offer your service, product or expertise without expecting anything in return. Once this happens, a trust is formed between you and the other person. If you decide to do business with one another, those interactions can eventually lead to a trusted relationship if you treat each other well and don’t “abuse the relationship for a one-sided gain.”
Trusted relationships take the most work and longest to form, but they are worth it because they “frequently create huge opportunities and have enormous long-term impacts” on organizations, the authors write.
You don’t need to have deep relationships with everyone you meet. It’s best to choose a few people to enter into trusted relationships with and have a bigger group of people for targeted, tentative and transactional relationships.
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Originally published on Business Insider.