Building Long Term Business Relationships

I have stressed the need for real estate investors to make a short and long term plan to keep them on track of achieving their goals.  Equally important is to not let the daily tasks of running your business distract you from the “big picture”.  You need to not lose sight of how each investment you make fits into the bigger picture of your investment portfolio and goals.  The same could be said in building your business relationships.

Business relationships like most relationships take time to develop, but the benefits are long term, sometimes over a life time.  In business, you deal with many people daily.  In my business, I have over 200 contacts in my phone and email database, and that list is growing.  I look at each contact as a long term relationship, even though many of the contacts I have, I have only dealt with them on a limited basis.  However, that does not mean the relationship may not yield benefits in the future, so I spend a good amount of time keeping the cultivating the relationship, by staying in contact by phone or email.  A few days ago, I spoke with someone who I talked to several years ago about a deal in Las Vegas.  Nothing materialized there, but we kept in contact mainly by email.  When I spoke to this person, we caught up on what was happening with our businesses.  He presented me with some ideas, and projects he was working on.  He also may be interested in investing in some of my ventures.  We will follow up with each other with more information.  I don’t know if any fruitful business will come out of this, but by maintaining the relationship, the possibilities still exist.  I could have dismissed this contact since I am no longer investing in the Las Vegas market, but to do so would have closed the door on a relationship in the future.

Sometimes in business, our preoccupation with the bottom line distracts us from the “big picture”.  The big picture is the long term business relationships we should be builiding.  Sometimes, we as business owners are focused on a few dollars on the bottom line that we neglect business relationships that could yield far great profits in the long term.  For example, many of my best deals have come from referrals from loan professionals I have done business with in the past.  They have put me together with other people I have done many successful deals with.  When I am shopping for a loan, I go straight to these loan professionals without much thought to the rates.  I know they will be competitive.  I may be able to get a better rate elsewhere if I shopped around, but to me an 1/8th or a quarter point difference on the interest rate is not worth hurting the business relationship I have with these people.  By having a good business relationship with these people, it has made me profits many, many times more than the interest rate savings.

John Chow at John Chow Dot Com wrote about not taking advantage of an opportunity to save a great deal of money by making a deal with other vendors, and undercutting his business partner.  John chose not to alienate his business partner because of the existing, successful relationship he has with this partner.  Due partly to this relationship, John has become one of the most popular blog on the Internet.  To risk the long term benefits of this relationship to save money would be foolish.

Besides the monetary benefits of maintaining long term business relationships, there is the personal aspect.  Personal relationships is what life is about.  It makes our personal and business lives more enjoyable.  As a business owner, I enjoy one thing that I did get to enjoy in all of my prior jobs.  I get to choose who I want to work with.  I don’t have to deal with people I don’t get along with, so the people I do work with, I enjoy being around them.  I want our business relationship to work not only for its monetary benefits, but also I care about them as individuals, and want them to succeed.  The relationship is what I value, and I would not jeopardize that relationship over a few dollars on the “bottom line”.