Business Relations

AAA

DEFINITION of 'Business Relations'

The connections that exit between entities involved in the business process. The term business relations refers to the connections formed between various stakeholders in the business environment, including relations between employers and employees, employers and business partners, and all the companies with which a company is associated.

For example, one company's business relations may include a long list of customers, vendors, sales leads, potential customers, banks, stockbrokers and any municipal, state and federal governmental agencies. Essentially, business relations are all of the entities with which a business is connected or expects to have a connection.

INVESTOPEDIA EXPLAINS 'Business Relations'

Businesses depend on the development and maintenance of vital relations with employees, business partners, suppliers, customers - any person or entity that is involved in the business process. Companies that intentionally cultivate and maintain connections may be more successful than those that ignore these connections. Strong business relations can promote customer loyalty, customer retention and collaboration between businesses in the supply chain.

From a financial standpoint, business relations can theoretically make or break a business. Strong relations can lead to better business processes, improved communications, better policies and procedures, and mutual cooperation, resulting in better products, services and revenues. Weak relations can lead to detrimental outcomes, including unhappy employees, dissatisfied customers, negative reputations and limited growth.

Many companies use a number of strategies to ensure strong business relations are fostered and appropriately maintained. Relations may be established through a number of means including social media, emails, phone calls, face-to-face meetings, etc. Relations can similarly be maintained through frequent contact (by phone, email, in person, social media, etc.).

Primary advantages of developing and maintaining business relations include customer and employee loyalty, building a positive company image and increased business performance, all of which can be important to the company's bottom line.

RELATED TERMS
  1. Sales Lead

    A prospective consumer of a product or service that is created ...
  2. Business-To-Business Advertising

    Marketing efforts directed toward other businesses rather to ...
  3. Business Model

    The plan implemented by a company to generate revenue and make ...
  4. Business To Business - B To B

    A type of commerce transaction that exists between businesses, ...
  5. Business To Consumer - B To C

    Business or transactions conducted directly between a company ...
  6. Poison Put

    A takeover defense strategy in which the target company issues ...
RELATED FAQS
  1. How is minimum transfer price calculated?

    A company that transfers goods between multiple divisions needs to establish a transfer price so that each division can track ... Read Full Answer >>
  2. When would a vendor care about its accounts payable turnover ratio?

    Vendors can act as suppliers or manufacturers, so they must pay attention to accounts payable and accounts receivable. An ... Read Full Answer >>
  3. What are some examples of debit notes in business-to-business transactions?

    Debit notes are a form of proof that one business has created a legitimate debit entry in the course of dealing with another ... Read Full Answer >>
  4. What is the difference between payment netting and close-out netting?

    Both payment netting and close-out netting are methods of settlement between two or more parties, used to reduce risk exposure. ... Read Full Answer >>
  5. What factors go into determining a business's shutdown point?

    Three main factors help determine a business' shutdown point: how much variable cost goes into producing a good or service, ... Read Full Answer >>
  6. What are the pros and cons of a business temporarily closing once a shutdown point ...

    The first and primary benefit of a business stopping operations after crossing a shutdown point is that it won't run the ... Read Full Answer >>
Related Articles
  1. Professionals

    Keeping Clients Through Good And Bad Times

    If you work in the financial industry, the secret to keeping clients happy is to be consistent.
  2. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  3. Entrepreneurship

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  4. Investing Basics

    Explaining Tender Offers

    A tender offer is a broad public offer made by a person or company to purchase all or a portion of the shares of a publicly traded company.
  5. Fundamental Analysis

    Can Japan's Stewardship Code Turn Passive Funds Into Active Managers?

    Institutional investors in Japan have been criticized for being too cozy with corporates. Can a code force them to focus on the needs of beneficiaries?
  6. Investing Basics

    Explaining Non-Controlling Interest

    Technically, a non-controlling interest is any percentage of ownership that is less than 50% of a company’s voting equity.
  7. Investing

    4 Future Jobs In The Sci-Fi Future

    As long as the human race has problems, we'll continue developing new things and ideas to solve those problems.
  8. Investing Basics

    How Southwest Airlines Has Won Over Travelers

    Understand what Southwest Airlines' competitive advantages are and how they manage to edge out other airlines.
  9. Entrepreneurship

    Comparing Impact Investing & Venture Philanthropy

    Impact investing and venture philanthropy might be similar, but there are differences and one is more popular than the other right now.
  10. Investing Basics

    Explaining Privatization

    For a publicly traded company, privatization is the act of transitioning the company to ownership by private individuals.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!