At the end of the day, business is really about personal relationships. Between you and your customers, employees, subcontractors, suppliers, and (groan) government regulators. It’s not enough that you have to battle Murphy’s Law to get each business function performed effectively. Functions including: planning, lead-generation, design, estimating, sales, document preparation, permitting, hiring, training, material takeoffs, purchase orders, scheduling, project management, job costing, payroll, payables, receivables, warranty fulfillment, and financial review and analysis. You must also manage the less-quantifiable aspects of all these responsibilities–the impressions and expectations of the people with whom you interact.

In popular business jargon, each point of contact described in the first sentence above is a “stakeholder,” or someone who is in some way affected by your actions. It’s your job to manage the outcome of your actions on your stakeholders. The most obvious and important stakeholder is your customer. I won’t indulge in the argument that they’re all your customers, because that can become an exercise in semantics. The customer is the customer, period the end. So the $64,000 question is do you know who your customer is? If not, can you effectively manage the intangibles of those relationships for your mutual benefit? I would argue “no.”

In developing systems for use by over a hundred individual business owners–our franchisees–we surveyed customers not only to understand key demographic criteria (household income, age, gender, occupation, and education), but also to understand their reasons for purchasing and their satisfaction with both the finished project and their relationship with us. We developed a profile of a generic customer–specifically the person who would initiate the decision to purchase our service–and tailored all our marketing messages to appeal to that person. Our sales methodology evolved into a finely-tuned process designed to speak from that customer’s point of view. Recognition of who our customer was helped to shape the elements that defined our business, from the use of colors and images to behavior and language. You should seek understanding of your other stakeholders as well, especially your employees, but not necessarily to this level of thoroughness.

The key first step in the relationship-building process is to establish realistic expectations. While this is an absolute must for dealings with your customers, it’s also critical in your dealings with your other stakeholders. Obviously, your success (or lack thereof) in establishing realistic expectations with your customers, employees, subcontractors, suppliers and government friends will determine the quality of the outcomes you achieve. Think of expectation-setting as the oil that lubricates the pistons in an engine. Without it, the engine will quickly overheat and seize up.

And it’s not just the measurable aspects of those expectations that need to be communicated (such as when the crews will show up, whom to call for a problem, when payments are due), it’s your company’s values–transparency, responsiveness, and quality of workmanship. When you’ve successfully communicated your expectations–and just as important, really heard what your stakeholders’ expectations are–you’ll have benchmarks that make it easier to handle the numerous predictable and unpredictable issues that regularly percolate in all your business relationships. And you’ll have created the foundation for managing the critical "people" element of your business.

--Rick Provost has over 20 years experience helping to build the country’s largest design/build franchise network specializing in exterior home improvement.  Formerly the President and CEO of Archadeck®, Rick now provides his franchising expertise through The Consultancy, a consulting firm specializing in business systems development for contractors.  Rick also is a facilitator, coach and consultant for Business Networks, a peer-review network for remodelers and insurance restoration contractors. He can be reached at