9 reasons why communication is important in business

9 reasons why communication is important in business

Wil Chan
By Wil Chan
May 3, 2022
7 min read

In the business world, there is only one way to translate your dream into success: you have to communicate it. 

Whether it be with your business partner, new employee, customer, or even your business insurance provider, you must get your point across clearly to get to the next level. 

There’s no other way to put it: effective communication in business is essential for small business growth and stability. And though it may feel elementary, many business owners neglect or mismanage this vital tool, which can derail their entire operation. 

Here’s how to take business communication seriously:

What happens when a business is incommunicado?

The overall structure of a company crumbles without effective business communication. Symptoms of poor communication to watch out for:

  • Basic tasks fall to the wayside
  • Schedules become disorganized
  • Roles and functions are not assigned
  • Employee morale declines
  • Important business relationships fall through

When do good communication skills matter?

Let’s be clear: good business communication skills are a daily necessity for every small business owner. They’re crucial for building and maintaining healthy workplace relations between you and your employees and lasting relationships between your company and your clientele. 

Business communication skills come into play whenever you: 

  • Speak over the phone or in-person
  • Send an email, chat, or text
  • Collaborate with a team member
  • Network with a member of your industry
  • Negotiate with a client or vendor
  • Listen to someone explain a problem

It does not matter how big or small your company is; you will benefit from assessing how your business communicates internally and externally. Here are nine important benefits of improving your business communication:

Set clear goals and expectations

If you have a clear vision of your company's goals, you are off to a great start. 

However, carrying out that vision requires you to communicate those goals so that everyone involved is on the same page about how to take action.

You want your employees to know what you expect of them and what challenges they may face along the way. That way, everyone will understand what they are working toward and do so efficiently, which improves your company’s overall performance.

Build a tight-knit team

Open communication in the workplace means a more cohesive team that can flow from one project or challenge to the next. 

When employees feel valued and that their opinion matters, they will contribute more and feel better while doing it — which improves productivity and retention.

But having open lines of communication also matters during tough times: it helps you spot fires and put them out early. And if team members can talk through difficulties, they’re less likely to jump ship when problems arise.

Earn the trust of your clients

Want to win new clients, keep existing ones, and earn their trust and loyalty? You guessed it: you’ll need to use effective communication strategies.

In practice, that means anticipating their needs and continuing to reach out after the initial handshake or sale. Keeping the communication going, and being ready to listen, means you’ll be able to address the hiccups that can happen after an initial business transaction or decision and help them find solutions. 

Companies that show clients that they understand them, know their needs, and want to help, are more successful every time. 

Improve customer service

Customer service can make or break your small business’ reputation, so be sure your team understands the importance of smart business communication in customer care. Clients feel valued and reassured if you offer responsive, empathetic customer service. But an unhappy customer service experience can turn a loyal client against a brand forever. 

The truth is, many companies fall short in this department by treating it as a distant afterthought once a sale is made. The best brands are known to take care of their customers well after purchase.

Ensure transparency

Not every unhappy client will get on the phone to let you hear about it (although we all know many will do just that!).

Transparency means being clear about any limitations, and any issues that might arise. This will help you manage client expectations and reduce negative reviews. It also makes it easier to deal with angry customers and solve problems. 

The same goes for your workforce. If you are upfront and open, your employees will be more likely to voice unhappiness or concerns that could bring down the entire team if left unaddressed. In turn, they will be more inclined to trust your decisions in the future.

Small Business communication

Get more referrals

What is the easiest way to get new business? Build a good rapport with existing customers! 

If you shine in their eyes, they will recommend you to colleagues, write a glowing review, or leave positive feedback on your website. 

It all starts with how well you communicate from the beginning and how you maintain that communication throughout the business relationship.

Reinforce rules and regulations

Transparency in business communication is vital to ensure that people follow policy.

Whether it's an employee that must use a specific process to complete a task or a client who signed an NDA for a business deal, you must initially communicate the intent of the policies you wish to enforce.

Written communication of some form that explains your business policy, as well as expectations of employees and clientele, helps create consistency across the board. Not to mention, it provides a legitimate reference point if ever you need to reiterate a particular procedure, rule, or guideline.

Stay organized

The critical function of a manager is to relay information from the higher-ups to their team. It could be as simple as a notice of a company-wide meeting or the strategy for an upcoming project. 

If the manager doesn't understand the information, they won’t be able to deliver the right information, and it won't take long for a total communication breakdown.

That’s why it’s so important to ensure employees and managers have all the information they need to coordinate with each other and different departments to accomplish shared goals.

Generate new ideas

What better way to grow a business than to do it organically and in-house? 

Ask employees what they think. If you give people opportunities to voice opinions and feel listened to, they will feel more comfortable sharing ideas. This information and inspiration can benefit the team, clients and the company. 

NEXT makes protecting your business simple 

Good communication reduces complexity so that your business can grow. And good insurance does the same. 

Protecting yourself with small business insurance is one way to ensure you, your clients and your customers are always taken care of. NEXT provides insurance for more than 1,300 kinds of small businesses, so you can make sure your hard work is protected.

We’ve streamlined our process so you can get a customized quote in just a few clicks. And you can chat with us any time if you need help. 

Get a free quote today.

9 reasons why communication is important in business


Wil Chan
About the author

Wil Chan is a content writer at NEXT and has been a professional writer for more than ten years. His work has been featured in publications including Forbes and Greatist. He has run a freelance business since 2016 and feels passionate about helping self-employed people in all industries succeed.

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