How to Choose the Right Financial Partners for Your Growing Company

Choosing the right vendors and financial partners is vital for successful growth. Here are some important factors to consider.

Mutually beneficial business relationships can offer significant advantages to your growing business, from increasing capital to adding new and complementary products or services. However, there are potential risks and challenges to bear in mind when you’re choosing partners. Depending on your terms, it might be difficult or costly to leave the partnership, or if you fail to do thorough background research, your important financial and/or customer information could be at risk. That’s why it’s critical that you make these decisions carefully by doing your research and due diligence prior to signing any agreements.

On the flip side, working with the right financial partner can help you improve your finances, scale your business and enhance productivity, all while maintaining privacy and confidentiality. It’s also in your best interest to seek partners that align with your business goals, as well as your personal and professional values.

So how do you choose the right financial partners? In this post, we’ll explore some key factors to consider.

Prepare yourself first

Sure, you’re evaluating potential partners, but they will also be evaluating your business, so it’s important to be prepared so you can answer their questions. Here are two areas for reflection:

1. Know your company’s vision, values and goals

If you want to work with partners that share similar values and goals, you’ll need to set or revisit your own. Have you defined a clear vision for your business? Create or update your vision statement, if necessary. Reflect on your long-term goals and set actionable steps to achieve them. Think about how you conduct yourself and your business. Which values are nonnegotiable?

2. Define your criteria for potential partners

To find the right financial partners, you should understand exactly what you need and expect from them, so you can communicate that clearly. Documenting your criteria ahead of time will also help you to compare potential partners on each of the listed items, and ensure you don’t forget to ask any important questions you might have about their products and services. For example, here at C2FO, we often talk with new suppliers to answer important questions or to clarify potential misconceptions about our early payment program.

Key factors to consider when selecting financial partners

Choosing the right financial partners can make a big difference in the ongoing success of your business. Here are some factors that can help you choose an effective partner:

Values and commitment

Generally speaking, sharing common ground is the key to establishing an effective partnership. For this reason, you should ensure your prospective financial partners have business goals and values that are aligned with yours. This goes beyond the desire to simply make a profit — it means establishing whether or not you share the same vision for the future and similar core values that represent who you are as a business and guide how you conduct business. Research shows a strong link between values-driven partnerships and financial performance.

Additionally, ideal financial partners should be able to demonstrate that they are committed to your success. Have they taken the time to familiarize themselves with your industry and/or products and services? Quality partners should be able to show they have invested time in learning about your business.

Integrity

Sometimes, to win a contract, a company will make promises it can’t fulfill. Others may have hidden fees, misleading terms or fail to disclose potential problems. Companies should be transparent about what they can and cannot do. Be aware of red flags that may indicate dishonest behavior. A business with integrity will be open to your questions and work to mitigate any concerns you might have before entering a partnership.

For example, companies that might be hesitant to try a new finance solution after having bad experiences with other providers are reassured by how C2FO portrays all terms honestly. As one of our customers said, “With C2FO you know that when you’re submitting the invoice, you know what the deductions are going to be and that you’re going to get paid within 10 days. No surprises.”

Remember that integrity is a two-way street. It’s important that you be honest with potential vendors and fully disclose any circumstances that could impact your partnership. The value of a long-term partnership based on mutual trust and accountability cannot be understated.

Professional reputation

Financial partners should also have a solid reputation. Partnering with a business that is less than reputable can be damaging or reflect poorly on your business, even if just by association. Whether it’s negative reviews, lawsuits, service outages, fraud or data breaches, consumers take notice, and this can cost you. For example, consider how Barclays Partner Finance was required to fully compensate customers that were improperly sold loans in a partner timeshare scandal with Azure Services.

It’s in your best interest to devote some time to researching your potential partners’ online reputations. These days, it is quick and easy to do a Google search that will return plenty of informative results. Look for reviews, comments, case studies and media coverage, taking note of anything that could be problematic. Be mindful, however, that even the best businesses can have unsatisfied customers. When in doubt, if any questions arise, talk to prospective partners directly or ask if they can give you referrals from existing customers.

Flexibility

From time to time, your business may encounter unexpected challenges, opportunities or fluctuations in seasonal demand that require flexibility from all parties involved. A partner’s ability to adapt and respond to change, work with you to make adjustments or help you find alternative solutions is critical.

For example, there may be times when you need to adjust terms or delay payments. An ideal financial partner should be willing to accommodate your needs to a reasonable extent. Or if your company has cash unavoidably tied up in accounts receivable, you might need the assistance of a flexible partner to free up working capital. One of our customers said, “When those things happen, we value C2FO as a great partner because it keeps us consistent and gives us the flexibility to get paid early when and how we want.”

Open communication and responsiveness

Communication is another big part of a business relationship. Strong partnerships require a solid foundation of trust, and trust is rooted in open and honest communication. Find a partner that communicates, is inquisitive and genuinely listens to any concerns you might have. This will help you establish a sustainable long-term business relationship that can weather ups and downs.

Both parties in a relationship rely on each other to stay informed, so you should look for a financial partner that is supportive, transparent and prompt in its correspondence with you. How responsive a company is can tell you how much it cares about your business relationship and how committed it is to helping you succeed.

In summary

Choosing the right financial partners can make or break your business. A healthy and sustainable long-term relationship with a partner that is reputable, transparent, flexible, closely aligned with your values and truly invested in your success is an invaluable asset. Therefore, it’s in your best interest to make these decisions carefully and do thorough research to ensure you find the partners with the best fit for your growing business.

Want to team up with an innovative financial partner to increase working capital and grow your business? Learn more about C2FO’s mission and the people behind our Early Payment platform.