In the small-business community, networking involves the owner getting out into the open and meeting people. These interactions can take place at organised workshops and seminars, social events, or even on the golf course. The goal of networking is to continually expand the number of business contacts you have. Although it is important for an entrepreneur to focus on the challenges of running his/her business, participating in the business community yields substantial benefits that are well worth the time devoted to networking.
Networking is an effective way to meet prospective customers in an informal environment. You don’t make a sales pitch so much as introduce yourself and your business to your prospects. The goal is to exchange contact information and open an avenue for further discussion. You may also meet owners of other businesses who are interested in discussing possible partnerships such as marketing each others’ products or services. In this less formal meeting environment, you can build a positive relationship with the other business owners before starting serious negotiations.
In a small company, it is critical that you hire the best-qualified employees. Every team member plays a key role in a small company’s success. The process of interviewing and vetting candidates for a position can be time-consuming. A small-business owner may not have the time to conduct as thorough a search as he would like. Networking with trusted business associates can make the hiring process go more quickly and ultimately help find the right person for the job. The people in your network can recommend people they know or have worked with in the past, narrowing down the number of candidates you have to review.
Having someone introduce you to a decision maker can make a business transaction go faster and increase the probability of a successful outcome. For example, small businesses seeking capital are competing against many other entrepreneurs to gain access to venture capitalists or angel investors. Through networking, a small-business owner may meet someone who already has a strong relationship with a partner of the investor group. Being referred to the investor group by someone they trust increases the chances you will be given the time and attention you hoped for.
To build and maintain a competitive advantage, a small-business owner must know what competitors are doing — their strategies — and how well they are doing. You need to plan your strategies with this competitive environment in mind. You should craft your marketing message to differentiate your company from your competitors, to show why your products and services are better. Networking provides an opportunity to talk to people who know of your competitors, and even to your competitors’ customers.
A small-business owner has to be skilled in various functions of running a business, such as finance, product development, sales and marketing, and long-range planning. He should strive to build his skills as his company grows. An owner may have a gap in knowledge or experience, such as not understanding how the Internet can be used to market products or services. Networking with people who have such skills will allow him to tap into their knowledge and experience. By learning from them, he can become more effective at leading and expanding his company.