This weeks podcast episode of I hate Numbers looks at How to develop Trust in Business. Without trust, you have nothing. With it, you can do great things.

Trust, a firm belief in the reliability, truth or ability of someone or something.

BOGOF

Buy One Get One Free is a pricing strategy. I am applying that to this week’s episode, you get two themes wrapped up in one podcast. Trust and Credit Control, they have more in common than we think.

Do you need to trust anyone?

Trust is an integral part of our business lives. Your Business does not operate in a vacuum and must invest in TRUST.

Your business cannot operate without TRUST. Whether that's trust in yourself, your suppliers, your customers, or those that you look to work with.

TRUST which requires a leap of faith as opposed to blind faith. Blind faith (or stupidity) is like a non-swimmer jumping into the deep end of a swimming pool and hoping that somehow, they would be ok

Trusting without checking

You shouldn’t trust someone at face value, just as much as you wouldn’t to give credit without some checking. You need some validation and/or evidence of that person ability. In the words of Ronald Reagan, “Trust, but verify”.

Listen to find out more

Extend your trust

Extend your trust as your confidence in your business relationship increases. It’s the same with credit control, when your customer conducts their account correctly, you improve your terms of business.

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Keep an eye on things

With TRUST, if you feel someone is not behaving as expected then your need to deal with it. Avoidance, just, like in credit control helps no one

With TRUST, with all the best will in the world things don't always work out. You need to act, show some teeth. Kindness does mean softness. When customers don’t pay on time and are taking advantage you need to act.

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Systems mixed with the human

Systems and systematisation plays a major role in TRUST and getting paid on time. You need to blend in the human, commercial and business judgment.

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What Next

How to develop Trust in Business is not just one factor.

Now, make yourself comfortable, sit back and listen. Most importantly, subscribe so you do not miss an episode.

In This Episode

• Understanding the importance of TRUST in business
• Appreciating what TRUST and credit control have in common
• How to develop TRUST in business
• The role of systems, procedures and people in TRUST
• Developing your own Numbers confidence and decisions
• Take more control of your numbers to help make you money, survive and thrive

Links

https://podcasts.apple.com/podcast/proactiveresolutionss-podcast/id1500471288

https://play.google.com/music/m/I3pvpztpjvjw6yrw2kctmtyckam?t=I_Hate_Numbers

https://open.spotify.com/show/5lKjqgbYaxnIAoTeK0zins

https://www.stitcher.com/podcast/proactiveresolutionss-podcast

https://tunein.com/podcasts/Business–Economics-Podcasts/I-Hate-Numbers-p1298505/

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Trust. A firm belief in the reliability, truth, or ability of someone or something. Hi folks. Welcome to episode 43 of I Hate Numbers. The show's mission is to help improve your numbers mindsets, help you make more profit in your business, save time, and help you enjoy your business life. Now, today's podcast is about trust in business and, more particularly,

why trust in business is like credit control. Bear with me. Now, the concept, idea, and practice of trust is a very broad one. Trust is an issue that plays an intrinsic and major part, not only in our business lives, but our working and personal lives. Over the many years of working in various sectors and industries where I've advised and supported those running their own businesses, whatever shape and dimension, whether they're private or not-for-profit, myself being an owner manager of 26 years, certain truths become self-evident,

and one of those is that you cannot achieve anything at whatever level without trust, either in yourself or in others. Now, ideas and actions are usually best illustrated for me and absorbed by way of analogy and comparison, and for this podcast, in the context of trust, I've drawn a comparison with credit control.

Not only does this highlight two important elements behind your business sustainability and success, but you get two ideas and thoughts for the price of one. Now, whether that's good value or not is for you to decide. There are a huge combination of factors that make up business failure from poor cash flow, delays on projects, poor management,

poor marketing, overreliance on a single product or a single customer, and management skills. Trusting people in our business, our working and social lives can be seen as a challenge, and my simple analogy would be equivalent to a business that offers credit facilities to his customers. Now, factor number one. The business,

your business may not wish to offer credit facilities, Ideally, nobody would wish to offer credit to a customer. We prefer cash to be paid for the transaction. Cash is the commodity that makes sure our business worlds keep turning, but in order to get those sales and keep the customers, in order to compete in that marketplace, we have to invest trust.

Unless we can run a business single handedly with no reliance on people, then we need to trust them and our judgments. Factor number two. Before you give credit facilities to your customers, you need to check the credit worthiness of that customer. Typically, we would offer limited credit facilities and limits until we build up that trust in that customer.

Likewise, when it comes to trusting other people, we shouldn't blindly accept people at face value and initially overinvest time and energy in them. We need to do our due diligence. Whether they're friends or family, we need some validation, some evidence of that person's ability to deliver what they're promising.

Factor number three. We know that customers who've got credit facilities, if they behave themselves, they conduct their account correctly. We may extend credit facilities in terms of increasing the amount that we provide to them on credit, perhaps increasing the time it takes for them to settle their account.

We've got a trust in their relationship with us, and therefore, that means we extend those credit facilities. Now, when it comes to business and personal relationships, the more that we work with those individuals, the more that we work with third parties, then the trust levels build up, and therefore, we can engage more.

We may do more business with them, but a track record validates our confidence in trusting that party even more. So, we talked about the initial relationship building just in terms of like offering credit facility for customer. We're talking about checking out the customer for credit, and we check out the party that we're likely to be doing business with, due diligence for want of a better term.

We are saying that as that confidence reinforces, the trust levels build up, then we do more with them. Now, number four. Our credit control system has to be operated with certainty and we need to avoid any weakness in terms of protocol, procedure, and action. We need to keep an eye on how our customer is using those credit facilities.

Typically, we may do what's called an age-receivable analysis to see how long they're taking to pay, how long it's overdue. If there are breaches in the terms that we provided, we act with assertion, not aggression. Sometimes with compassion, sometimes with understanding because we don't necessarily want to destroy a good business relationship.

Likewise, it's the same with trust. If somebody you are doing business with, if there's a supplier that you've taken on, and they're not actually delivering, they're not actually doing what they said they would do, then what we need to do is to avoid the ostrich stance and we need to confront that situation.

Now, we don't mean by acting aggressively, but we can't just let the missed beat thing just disappear. You've got to act when something is not being delivered. Factor number five. It sometimes happens in our businesses that the customer relationship breaks down. Perhaps their accounts aren't being settled on time,

promises to pay haven't materialised, and in that case, we may need to consider some form of formal recovery action. We may send letters out, which are a little bit strongly worded, but it may get to that point of actually saying, let's walk away from that situation, or instigate formal recovery proceedings.

Likewise, the same can be said with trust. Sometimes, with all the best will in the world, things don't quite work out. People don't deliver what they've promised to do. Circumstances may be such that they're unable, but when that happens, they let you down, or act unethically and without integrity, you need to show some teeth.

People who act kindly are sometimes misinterpreted of having no strength, and they're seen as weak. So, there are occasions in our business lives where we need to show teeth. By all means, we wish to conduct ourselves amicably with a degree of friendliness here, but we need to make sure that when it comes to it, we need to act and not abrogate our responsibilities.

Now lastly, number six, when we offer those credit facilities. Now, how it can be conducted? It can be an automated approach. Typically, if you've got internal digital systems that are operating there, we occasionally might override those automated systems. We may ignore them, and occasionally commercial ambitious judgment overrides what your formal systems are telling you.

Now, you can rely on trust, which requires a loop of faith as opposed to blind faith. At its basic level, blind faith or bracket stupidity would be like a non-swimmer. Jumping into the deep end of a swimming pool and hoping that somehow that would be okay. When it comes to trust, yes, certainly instinct comes into play.

Certainly your own gut plays a major part, but you still need to go through some degree of formality, doing your due diligence on that individual, or company, or business that you're likely to build a relationship with, seeing the evidence of what they can do. Don't rush into a major contract or a piece of work with that individual or that business.

Build it up over a period of time. Again, don't just rely on instinct and a shake of a hand. Otherwise, there will be pain in the future. The subject credit controller is a major important to all businesses, private or not-for-profit. Survival, sustainability, and growth is not just based on the numbers.

It's not just based on cash coming into the account, even though that's critical, but trust itself is a major contributor to your future sustainability and growth. So, to recap, number one, you cannot grow or run your business without some degree of trust in others. Just like in credit control, you cannot grow your business, sustain your business unless you offer credit facilities.

Number two, do your due diligence on the business that you are building a relationship with. Don't just blindly go into a relationship. Check out an evidence. Just as much as you wouldn't give credit facilities without doing some form of checking. Number three, trust is something that's earned, should not just be given.

So, make sure that you don't give too much away. Make sure you don't invest too much of yourself in that relationship on the outside. Build things up slowly. Number four, make sure you have got certainty and you are monitoring the situation. If somebody's not delivering, if somebody is not achieving what they said they would do, then you need to have the conversation with that party.

Number five, as in all things in life, relationships can break down. So, if your relationship with your partner, your supplier, your business does not quite go as you expected it, then you need to do something about it. You need to show some teeth, you need to show some confidence, and you need to act assertively.

And lastly, have some systems by all means. So, have a procedure when you just develop new relationships, when you develop with new suppliers, make sure that you've got a formal system that you adhere to. Well, folks, I hope you got some value out this podcast. I hope you got some takeaways there. I'd love it if you could subscribe and share that podcast with your friends, families, even as a little Christmas gift to them.

So, until next week, have a great week. We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.