Step back from the world you know and ask yourself whether or not you really know who you’re working with? We’re not talking about customers here but clients and investors. These two customer groups are to be treated separately from the conventional customer. The normal customer is the average Joe. They will be buying products and services from you to enhance their life in some way. Clients however will be doing the same to enhance their business with you. Clients are made up of distributors and B2B companies. Investors will be putting money into your business purely to get a return. Therefore, these are the two largest groups that you’ll run into regarding large sums of money going into your business. A lot of inherent risk is carried in these relationships so it’s important to know what you could be exposing your business to.
In it for the thrill
Some investors will be putting their hard-earned money into your business not because they believe in you but because they want a big return (ROI). Do you really want this in your business? A CEO should have the attitude of wanting his or her investors to believe in the business almost as much as they do. The trouble is with investors that simply don’t know or care about the industry and sector you’re in, their expectations won’t be realistic. Investors that know about the challenges you face are more likely to be long-term players in the growth of your business. Investors that are looking to make a quick buck and enjoy the thrill of the ride, will run away at the first sign of trouble; which is inevitable. Forming a close relationship with investors is vital so they remain confident in your business even during hard times.
Protecting yourself from clients
Using industry specific services is recommended to small businesses because they are able to protect themselves. Unlike large businesses that have their own audit teams and risk management departments, small businesses have to rely on services to seek out risk for them. Client risk is perhaps one of the most complex as you literally have to perform a background check on them. Money laundering through small businesses has unfortunately became a real issue in modern times. So using AML Compliance if you are a real estate agent keeps you on the good side of the law. A client might be trying to buy a property from you for the reason of ‘washing’ their money which they have obtained through illegal activities.
Make it personal
You’re right to be skeptical of who you do business with and whose money you accept. Employing your own charm to see who the investor or client is, could allow you to see their true genuine intentions. Take them out to dinner before you sign anything, talk to them about other things besides your business. Try to understand their body language and listen to any subtle unintentional hints they give about their aims.
Knowing who you’re doing business with could save you from serious trouble. Even if you had no intention to be doing something illegal, you may be made an accessory after the fact if you’re not careful.