Myth No. 9 — Business Friendships Are Always Assets

When is business-friendship an asset? The easy answers might be: getting better pricing and service because you have an “in”; finding out ahead of time where your bid ranks or; learning that one of your employees is planning to leave right after he gets his bonus, but is the inside “scoop” really worth it?

Inside information and preferential treatment may or may not be an advantage depending upon how it is given and taken. If you get better pricing because your work flows better and the subcontractors find your jobs more profitable, good for you, but you have earned it. However, if you get a price break because you got close to the salesman, that may be good or bad. This salesman might have an ethics problem that someday could find you on the wrong end of the same stick.

But before you label me as a complete cynic, let me say that of course being friends with suppliers is not a bad thing. I have many such friendships that I treasure, but they come from mutual respect, good service, good pay and seeing someone’s community side like Habitat, Rebuilding Together and Little League coaching. A supplier who does these things would be offended if asked to leak a bid or to cheat.

One of the real assets of a business friendship is the rapport with which you start when problem solving.

Some years ago a friend of mine from Illinois quickly worked out a difficult problem with his lumber supplier because of their business friendship. That solution helped supply materials quickly to aid with tornado repairs in their town. It was the mutual respect that helped the two businesses quickly solve a problem that mere acquaintances may not have been able to do.

A liability of a business friendship for my company has been the extra time contending with bad service or pricing. If a business friend is trading on getting slack because of the friendship and without asking for it, then who needs this kind of “friend.” This type of friend is not long for the business world.

Here are some guidelines for business relationships that can mature into business friendships:

  1. Never ask someone to bend his or her ethics. If you do, it will tell them something about your own.
  2. If you socialize together, pick up the tab some of the time. Go to lunch with your salesman and buy or split the tab; you will be surprised at the reaction.
  3. Keep the business relations out in the open so that your employees see that the service is better and the pricing is competitive. They’ll see that’s why you’re friends, not because of the fishing trips or the football tickets.
  4. Don’t leverage the business you do with someone to get them to support a cause unless you do so as well.
  5. Respect a confidence — with some folks there are only two kinds of secrets: those that are not worth keeping and those that are too good to keep. If you run off at the mouth, you’ll run out of information.
  6. Be sure the friendship understands that if the business sours for whatever reason (service, price, pay or ethics), the friendship will be a casualty as well.

Maybe a good way to view a business friendship is like a balance sheet, recognizing that the net worth is made up of confidence, trust and respect, not deals. Friendship is one of the most wonderful assets in the world; I know, I have had to draw heavily on mine recently. Thank you to all.While you’re here ...