A business cannot work alone. It needs to make business connections with others. The most important business relationship will be with the customer. We have already talked about the need to find customers, give them good service and be truthful about the products, goods or service that you are selling. The customer is the best and most important friend of any business.
There are also other important business relationships. Who else should be included in business relationships, and what kind of business relationships should these?
A production business will need a business relationship with a supplier. This is who supplies the raw materials. For example, the juice business will need fruit to produce juice. That fruit is bought from local farmers. Each farmer who sells fruit to the juice business is a supplier.
A trade business will also need a business relationship with a supplier. For example, a small kiosk owner sells cold drinks to people who are walking and get thirsty. The small kiosk owner buys fresh fruit juice in a plastic canister and sells it by the glass. The fruit juice producer is a supplier to the small kiosk business.
The service business also needs a business relationship with a supplier. The same fruit juice producer is a supplier to a restaurant that orders juice regularly.
How do you form business relationships? It will be necessary to identify and make contact with someone who can make decisions. If you want to form a business relationship with a restaurant to sell them your juice, should you talk to the waitress about a business relationship, or should you talk to the person sweeping the floor? Of course not! They are not the ones that make decisions on business deals. It is important that you identify the person who has authority to talk about business deals and make decisions to enter into business relationships. It may be alright to talk to a waitress or person sweeping the floor to find out who the person with authority might be, however.
The person with authority to decide about business deals could be the owner or manager of the restaurant. Before deciding whether to do business with you, he will first be interested in learning what your business is all about. You can expect to hear the same questions which you have already put into your business idea. It is good for your business always to be able and ready to articulate your business idea clearly.
Sally wants to become a permanent supplier to the restaurant and sets up a meeting with the manager. It is important to make a good impression. She wants to know what the manager needs and explains why her juice would be a good product for the restaurant. The manager is convinced, and so they start to negotiate a contract.
Sally agrees to deliver juice to the restaurant every morning by eleven o’clock. The contract starts on the following Monday and lasts for the next three months. If the amount of juice needed changes, the restaurant will let Sally know one week ahead of time. They agree on the price per canister. It will be paid to Sally every week on Saturday. The contract can be changed if both parties agree, and it can be stopped if either party gives notice one week in advance.
Key Partnership Concept:
A system that brings together economic and social agents through cooperation between persons, institutions or organizations for a certain period aimed at strengthening the effectiveness of dealers in order to achieve the objectives that have been identified.
It can be defined as a network of suppliers and partners seeking to achieve a business plan. Companies can form a partnership to improve the quality of work, reduce risk and get more resources.
There are different types of partnerships we will talk about later. The simplest examples are the contract of some companies with the courier companies, so the delivery companies become partners in the performance of the work.
When forming partnerships, the following should be considered:
1. Agreements on partnership: it is important to make contracts in which the partners' rights are registered.
2. Specifying expectations of this partnership: it is very important to avoid differences where it is clear to each party what is expected of him and what he should do.
3. Impact of partnership on customers: it means that partnership can support the value they provide, not vice versa.
4. Profit for parties: it means that this partnership is a source of profit not loss for parties.
5. Selecting good partners for the benefit of business they provide, as some partnerships are good theatrically, but when they move to practical one, they are not in line with the goals of business.