Effective business communication is vital to the success of your organization. It has a major impact on your company's performance and employee productivity as well as on your bottom line. As a business owner, you need to be able to clearly communicate your vision and goals, build relationships with customers and potential partners and interact with your team.

Essentials of Business Communication

Managers, CEOs, team leaders and other professionals must learn how to be good communicators in order to fulfill their responsibilities. Whether you want to sell more products, build a strong team or maximize your marketing efforts, it's important that you master the essentials of business communication.

If you want to succeed, it's not enough to be a good strategist or have brilliant ideas. Sure, you can hire people to communicate with your clients and promote your services, but you still need to put your vision into words. It's your responsibility to provide feedback to your staff, listen to what they have to say and discuss the company's goals.

Business communication is all about sharing information among people inside and outside your organization. It can take many forms, such as formal and informal communication, internal and external communication, legal communication, lateral or horizontal communication and more. Think of it as a two-way channel for transmitting instructions, ideas, opinions, reports and so on.

In order for communication to be effective, it must be reciprocal. You need to talk clearly and listen carefully. Also, make sure you understand the fundamentals of business communication, which are:

  • Structure
  • Relevancy
  • Consistency
  • Clarity
  • Recency and primacy
  • Medium

First of all, your message needs to be well structured and have an opening, a body and a closing. Whether you're sending emails, making phone calls or presenting a project, keep these structural elements in mind. Start with a brief introduction of your message to let the audience know what to expect. For example, you could say something like, "Today, we're going to discuss our marketing strategy for the next quarter." Next, present your ideas in detail. Depending on the context, you may need to back up your statements with facts and figures. Close your message with a brief conclusion that outlines the key points you've discussed.

Make sure your message is clear and relevant to the target audience. Imagine that you're trying to explain to a customer that he needs a complete website makeover rather than a few minor changes. You might be tempted to discuss web design, search engine optimization, bounce rates and other technical aspects, but don’t do it. The customer may not know what these things mean and why they matter. Instead, you should focus on how a complete website redesign will benefit his business. Tell him that he'll reach more clients, increase brand awareness, increase retention rates, improve data security and so on.

Always keep your message consistent, but adapt for the audience and context. If you're constantly changing your mind, you risk losing your credibility.

It's one thing to tell your employees to safeguard customer data and keep their software updated and another thing to have a security policy in place. Written communication makes it easier to clarify ideas and ensure that everyone is on the same page.

Also, make sure your message is memorable. Include a strong, clear statement that reinforces your beliefs and relates to the topic. Consider starting or ending your message with a quote or another powerful opening. Sometimes, humor can help too. Whether you're talking with a customer or an employee, give her something to remember.

According to psychologists, some people are more likely to remember what they've last seen or heard. This is called the recency effect. Others tend to recall what they've first seen or heard, which is known as the primacy effect. Therefore, it makes sense to start and/or close your message with a powerful statement.

Another thing to consider is the communication medium. How do you plan to get your message across? There are different types of communication mediums, and each has unique characteristics. These include but are not limited to:

  • Presentations
  • Reports
  • Online communication
  • Business meetings
  • Video and telephone meetings
  • Email
  • Social media
  • Printed media
  • Contracts and other formal written documents

When you're writing a contract or filing legal papers, it's even more important to communicate clearly. Poor communication may result in hefty fines, fraud, defamation, revenue loss and expensive lawsuits.

Familiarize yourself with the laws in your state or county, including those related to advertising. Your marketing campaigns, for example, need to be truthful and comply with the laws in your industry. If you're selling dietary supplements, you may not claim that your products cure or prevent diseases. Also, you cannot market alcohol and cigarettes as being beneficial for customers. Back up your claims with hard facts and make necessary disclosures.

Double check your business contracts and agreements. If you have something to say, put it in writing. Include a section that clearly defines the terms used in the contract. Add relevant sections, such as the contract term and termination, warranties, severability and confidentiality.

Pay attention to how you communicate with your staff too. Choose your words carefully. Refrain from making threats or discriminating against employees. For example, if you tell an employee that he's too young to take on a specific project, you may be accused of age discrimination. A manager who teases disabled employees can be accused of disability discrimination, even if his behavior wasn't meant to hurt the person in question.

Why Is Business Communication Important?

Knowing the key aspects of communication, it's not difficult to understand why it matters so much. Effective communication can strengthen your relationship with customers, employees and business partners while ensuring legal compliance. Furthermore, it can give you a competitive edge and help you make the most out of your marketing efforts.

The importance of external communication in an organization should not be underestimated. As a manager or business owner, you need to be able to convey your message to the target audience as well as to investors, shareholders, suppliers and potential partners. Live events, for instance, give you a chance to capture the attention of your prospects or secure funding for your small business. A well-thought speech or an engaging product presentation can boost your reputation and generate sales. Interviews and press releases allow you to inform customers and investors about your latest projects. For example, you might want to talk about your new collaboration with a brand or about a new line of products that will disrupt the industry. If you communicate clearly and deliver real value, you’ll generate buzz around your brand.

Internal communication is essential too. Nearly half of employees rarely or never leave a meeting knowing what to do next. In fact, 21 percent of professionals don't have a formal plan in place for internal communication. If you fail to clearly state the purpose and objectives of a meeting, you may create confusion and conflicts in the workplace.

Leaders who are good communicators can boost employee morale, reduce turnover rates and increase productivity in the organization. They also have a stronger bond with their teams and experience fewer conflicts. Furthermore, effective internal communication ensures that your employees understand their roles and the contribution they're making to the company’s growth and success.