This study reports a range of positive effects of trusting relationships between leaders and followers on multiple measures of performance in small professional service firms. Six performance measures were used: financial outcomes, staff and customer satisfaction, productivity, and staff and manager tenure. Predictions that firms with high levels of manager-follower trust would outperform their low-trust peers were supported on all measures. Importantly, the findings indicated that retaining managers and staff in small firms is associated with high levels of manager-follower trust. Key points: Fostering high levels of trust between managers and their staff enhances productivity and financial performance. Both managers and employees stay longer in small firms with high trust environments. Customer satisfaction is greater where managers and their staff enjoy high-trust relationships.