Welcome to Communication Essentials!
Hello future entrepreneurs! Communication is the heart of any successful enterprise. It’s how you sell your ideas, manage your team, and gain support from investors.
In this chapter, we will break down the different types of communication you will use every day, ensuring you always choose the right method for the right person. Even if you find this topic challenging, remember: you already communicate constantly! We are just learning to categorize and optimize those skills for business success.
1. Formal and Informal Communication
Communication is often categorized by its level of structure and professionalism. Choosing between formal and informal depends entirely on your audience and the purpose of the message.
What is Formal Communication?
Formal communication is official, structured, and follows specific rules and protocols. It is used when professionalism, accuracy, and detailed records are important.
- Purpose: Legal requirements, reporting financial performance, making official requests, or addressing serious issues.
- Language: Professional, objective, respectful, and often highly detailed. Avoids slang or overly casual language.
- Examples (as per syllabus): Writing a formal report for investors (because investors need serious, reliable financial data), or a formal business meeting with a client.
What is Informal Communication?
Informal communication is casual, relaxed, and spontaneous. It often happens quickly and helps build personal relationships.
- Purpose: Quick updates, team bonding, sharing immediate thoughts, or solving small problems quickly.
- Language: Casual, familiar, uses everyday vocabulary, and may include slang or abbreviations.
- Examples (as per syllabus): Sending an email to a friend, or talking to a friend at lunch. In the workplace, this is often called "the grapevine."
Quick Review: Language Change
The syllabus requires you to know how and why language changes.
When you move from informal (chatting with a teammate) to formal (reporting to a bank manager), the language becomes:
- More precise: Using specific figures instead of vague estimates.
- Less emotional: Focusing on facts rather than feelings.
- More professional: Using full sentences and correct grammar instead of abbreviations (e.g., writing "I will communicate the results," instead of "k, gonna tell u the results asap").
Key Takeaway: Formal communication creates records and establishes credibility; informal communication builds rapport and is fast. Choose based on the importance of the topic and the receiver.
2. Verbal and Non-Verbal Communication
Communication isn't just about the words we speak (verbal); it’s also about everything else we convey without words (non-verbal).
Verbal Communication
Verbal communication involves using words, either spoken or written.
- Spoken (Oral): Face-to-face conversations, phone calls, presentations, meetings.
- Written: Emails, letters, reports, texts, adverts, manuals.
Why is it important? It provides clear facts, instructions, and data.
Non-Verbal Communication (Body Language)
Non-verbal communication is transmitting messages without using speech or writing. This is especially important in face-to-face conversations.
- Examples: Body Language, facial expressions, tone of voice, posture, gestures, and appearance.
How Body Language Affects Communication:
Your non-verbal signals often convey more than your words. If your words and body language contradict each other, people usually believe your body language!
- Positive Signals (Trust and openness): Maintaining good eye contact, standing or sitting upright, smiling, and nodding slightly.
- Negative Signals (Disinterest or anxiety): Frowning, looking away repeatedly, crossing your arms (can signal defensiveness), or constantly fiddling with objects.
Don't worry if this seems tricky at first! Practice observing successful entrepreneurs – notice how they use their hands and maintain posture during presentations.
Key Takeaway: Successful communication requires aligning your spoken words (Verbal) with your signals (Non-Verbal).
3. Appropriateness for Stakeholders
An essential enterprise skill (AO2 Application) is knowing which communication method is appropriate for which stakeholder. The audience dictates the medium (phone, email, report) and the style (formal or informal).
A. Communicating with Internal Stakeholders
Internal Stakeholders are people directly involved in running the enterprise, inside the organisation. Communication here is vital for motivation, coordination, and ensuring everyone works towards the same objective.
Key Internal Stakeholders and Appropriate Communication:
- Managers: Often requires semi-formal communication (emails, scheduled meetings, progress reports) to ensure efficient task completion.
- Employees: Can be a mix. Informal chats for team building, but formal written notices for contract changes, important deadlines, or health and safety instructions.
- Shareholders (Owners): Requires the most formal and detailed communication, usually through official financial reports and annual general meetings, to demonstrate transparency and return on investment.
Analogy: Talking to your family (Internal) – sometimes it’s a quick text, sometimes it’s a formal sit-down to discuss finances.
B. Communicating with External Stakeholders
External Stakeholders are individuals or groups outside the business who have an interest in its operations. Communication here often focuses on building reputation, securing finance, or making sales.
Key External Stakeholders and Appropriate Communication:
- Customers: Primarily uses marketing communications (posters, social media), but customer service requires clear, professional, and often empathetic verbal communication (solving complaints).
- Suppliers: Communication is usually formal (Purchase Orders, contracts) or semi-formal (business emails) to ensure clarity on delivery times and costs.
- Banks/Financial Institutions: Requires highly formal communication, such as detailed business plans, formal loan applications, and financial forecasts, as these relationships deal with large sums of money and legal obligations.
- Local Community/Government: Needs formal reports or presentations regarding environmental impact, zoning laws, or community support activities (e.g., if you are applying for a government grant or building a new factory).
Did you know? Using the wrong level of formality can damage your enterprise's reputation. If you send a very casual text message to a bank asking for a loan, they won't take you seriously!
Summary: Choosing the Right Type
When communicating in enterprise, always ask yourself these three questions:
- Who is the audience? (Internal/External stakeholder, like a bank or an employee?)
- What is the purpose? (To record official data, or to share a quick idea?)
- What level of formality is needed? (This determines the language and the medium.)
FINAL KEY TAKEAWAY: Effective communication involves selecting the most appropriate technique—formal vs. informal, verbal vs. non-verbal—based on the specific stakeholder and the objective you need to achieve.