David Johnson, PhD: email@example.com
possess what entrepreneurs need: capital and knowledge, while entrepreneurs can function as a vehicle from which they can expect a return. As for the employees, they are the heart and soul of any business, and establishing trust between them and the leaders is essential, as well.
Entrepreneurs and investors share joint and common interests when it comes to the growth of the business. While this means that they need to collaborate, often, conflict and chaos arise because of a lack of regular and effective communication, and transparency. Experts suggest that this happens due lack of trust, so entrepreneurs must focus on building trust with their investors and employees.
A lack of trust is problematic for everybody
A social resource, trust can empower and enable individuals, teams, and organizations to achieve their goals, no matter how difficult to achieve they may be. Trust is the glue that holds the team together and fuels innovation, collaboration, motivation, and productivity. Despite this, it remains in inadequate supply because of how the system is structured. It works in a way that diminishes trust instead of developing it.
There’s a common narrative that causes this to happen. When pitching to their investors, entrepreneurs usually set unrealistic expectations, such as a quick and high return or unrealistic revenue gains. However, time passes, and nothing goes as predicted. Entrepreneurs are left with nothing but excuses and trying to steer the focus towards the positive developments that don’t have significant relevance. Trust starts to deteriorate.
This cycle continues through the next quarters, costing the entrepreneurs their trust bit by bit. In the end, they are left with relationships that are clouded by mistrust, lack of loyalty, and misrepresentation, till the point that there’s no going back.
If this results in entrepreneurs losing their investors, they are deprived of the most efficient and accessible source of capital. Their business may be considered a failure by investors, which is a hurdle in its success or capability to reach full potential.
Building trust is essential
Developing relationships that thrive with trust is quite possible. The first step to do this is to be transparent about the factors that strengthen and erode it. Both the investors and the entrepreneurs need realistic while setting expectations. Investors should be mindful of the fact that despite the pitch, it will be a good two or three years before they can expect a return on their investment. Entrepreneurs should not oversell their expectations of returns.
You should first be honest and realistic with yourself before you share your expectations with your investors. Realize that you should be hoping for sustainable results that can lead to returns. This relies heavily on transparency and a relationship that involves clear and open communication. Setting these expectations right in the beginning will enable you to embark on a journey that follows a natural and comfortable path. This will be free of misinterpretations, broken promises, and falsehood.
Both investors and entrepreneurs should apply honesty and openness. This encapsulates accepting that the business is small-scale. Honestly and clarity in this matter helps them see in the long-run and devise sustainable strategies and practices that will help them take their business to the level that they want it to be at. They will also understand that time is needed for this growth. Creating a business that only focuses on the speed of growth can be dangerous. Instead of an approach like this, entrepreneurs can focus on adopting intelligent methodical practices that give enterprise value. In this approach, planning is crucial before action is taken. Such an approach encompasses the long-term scenario, which aligns the focus on the short-term goals, as well.
While trust is crucial in business ethics and leadership, it is also imperative when it comes to customers. Earning and nurturing the trust of your customers and clients is pivotal for your business. It is arguably the sole purpose of communications and marketing. Any purpose-led, value-driven, or customer-centered business should have trust as a core value. Every employee should own this value, starting from the top management to the front-liners who may be communicating with the customers in person, through phone or online. Trust should be reflected in the actions and behavior of your team and should go well with your character, culture, and values.
The challenging aspect of building trust is that you cannot buy it or force investors employees or customers to believe that you and your organization are trustworthy. As an entrepreneur, you need to put in more time and effort into trust-building as opposed to established businesses. Remember to treat every interaction as an opportunity to nurture trust and develop relationships.
Like money in a bank account, trust is stored in the accounts of your customers each day. They reciprocate this trust by browsing through your products, buying them, and sharing their confidential information with you.
Seeking to operate with a culture of trustworthiness communicates the message that your organization values and aims for transparency and accountability. Realizing the priceless value of trust can be game-changing for your business, so make sure that you give this adequate time and attention. Plan out and implement strategies, and leverage technology to implement them. Learn from others who are better at this than you.
If you are interested in formally learning how to get better at developing trust, try out one of our courses today!
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Canadian Training Partners, especially Mr. David Johnson, Ph.D. helped the author of this article to come up with all the research and development work and the author is too, part of the Canadian Training Program and has acquired diplomas under several courses Canadian Training Program has to offer, therefore attribution to the organization is vital to the entire project in particular and to all articles the author has been writing under this category. For all the details please visit Canadian Training Partners official website at www.canadiantrainingpartners.ca