Relationships are undoubtedly important in business as these can frequently lead to further business acquisition opportunities and growth in your current business. However, what happens when the relationships you hold on to are no longer the best commercial relationship for you?
The situation where your business has grown quickly to the point of outgrowing your advisor is a difficult situation particularly where the advisor is someone you consider to be a friend. The reality is anyone who is truly your friend will understand the need for you to make the best business decisions you can. They should hopefully also support you in making those difficult decisions as you will no doubt look for future opportunities to support them where appropriate.
Perhaps the simplest way to assess this particularly delicate situation is to ask yourself a question:
Would you happily just donate to a friend – thousands, tens of thousands or hundreds of thousands of dollars with no expectation of returning the money?
The question might sound silly however, the wrong accountant might miss tax savings, the wrong sales representative may cost you in discounts and the wrong broker may get you a lower sale price etc. All of these decisions can easily add up to hundreds of thousands of dollars in lost earnings for any small to medium business. Obviously on scale the larger the enterprise the higher the potential lost earnings.
To be a successful business owner it is imperative you know the difference between a business relationship and friend. There is nothing wrong with supporting a friend in business provided they are absolutely the best qualified advisor to support your business interests. If it is no longer in your business’s best interests to engage you ought to be prepared to make that, possibly very difficult, decision to protect the viability and sustainability of your business.
The sentiment in this article is not to be confused with ‘burning’ anyone in business, perhaps most especially people you consider friends. If you feel you need to move any aspect of your business then communication will be everything when it comes to protecting your personal relationships. You should clearly communicate this need and the reasons for it with the friend/advisor so they might develop their own business to become a better business.
If your friend is the best advisor for your business then you are in a very fortunate position! Just make sure you know the difference between a friend and a business relationship and… Good Luck!
– Robert Whelan, Managing Director at AP Group
