“It’s not what you know,
it’s who you know”, a quote that frequently comes up in the search feed when
you hunt for the word “networking”. Many firms, especially small firms with
limited resources, often neglect the importance of networking. In this paper,
we will discuss the importance of networking, drawing the light to the
different kinds of networking and how they could contribute to a company’s
growth.

What is networking?

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Networking is an effective method
for developing sales opportunities and contacts, based on referrals and
introductions – either face-to-face at meetings and gatherings, or by other
contact methods such as phone, email, and social websites.1
Small firms, given their resources limitation, might not be able to have a
business development team, but they should definitely have a person responsible
for business development. Nevertheless, networking should not be limited to one
person in the company, but every individual in the company must have a set
networking skills and should practice them during their work regardless of
their position in the company.

Types of Networking for Business

It is important to
distinguish between the different types of networking and how they should be
applied in business.  There are many
types of networking, but the majority fall under the 4 categories below: 2

1.      Social Networking

This type of networking is
present in our daily lives without even noticing it. It can be as simple and as
random as going to a friend’s house party or being present in a charity event.
More focused networking would be attending an organized social networking
event. In most cases, participation in social networking groups is not related
to business but there are always opportunities to meet people who could be or
know prospective clients. Therefore, we should carry our business cards
with us, and casually present it whenever we feel the need to do so.

2.      Business Networking

Business networking is
basically gathering up with other business associates to discuss their
businesses.

3.      Leads Groups

There are several setups to leads
groups, in most cases leads group involves sitting around a large table with
attendants (5 to 20 persons) consisting of one person per industry. Therefore,
if someone wants to be a part of a leads group that already has one of his/her
type of industry, this person would not be able to not join that group until
there is an opening created by a person of the same industry leaving.

In most leads groups you are
given a set amount of time to stand up and talk about your business ranging
from 2 to 5 minutes depending on the size of the group. This is a dedicated
time, no one else speaks and you take turns.

Leads groups are good for people
who are shy or for those who have difficulty in a meeting with no structure. If
you are a member of a good leads group, members are actively seeking referrals
for other members. This can lead to a great deal of business if you consider
the fact that everyone has a personal network of about 200 hundred people. This
does not mean that it is the best format of meeting or not a good format, but
rather it is good for you if you prefer structure.

4.      Networking with a Program

A lot of trade associations and
chambers of commerce follow this format. The meeting usually starts with open
networking for a period of 15 minutes to an hour. It is then followed by a
presentation by a guest speaker or a current member.

In this environment, you will
not have much time to really get to know people unless you always attend the
meetings. In most cases these meetings are best for initial contact followed up
by meeting prospects for coffee or lunch. It is advised that you use a system
of taking notes and qualifying prospects for later follow-up.

Generally, these meetings end
after the presentation and people linger for 15 to 30 minutes before clearing
the room.

 

Benefits of Networking for Small Firms

One of the most vital
success KPI for small firms is growth. To achieve a constant growth, network
channels of this company should grow. Regardless of the type of network
channel, different strategies should be implemented to achieve this growth. This
growth could be better achievable by networking. The key benefits of networking
that small firms specifically should value are: 3

1.     
Meeting
Investors

Being active socially and attending different
networking events would possibly lead to finding an investor. Being strapped
for cash is a familiar problem that small firms usually face and meeting an
investor would be the best solution. Other than the cash benefit, investors can
also serve as a mentor and adviser to the business.     

2.     
Gaining
Influential Partners

 Partnerships
are invaluable, especially for budding startups, and you never know who you’re
going to meet. The more connections you have, the more possibilities you’ll
have for partnership and expansion.

3.     
Expanding the
team

In the early stages of your business, your
team is going to be the force that drives your company forward. Networking and
building connections is one of the best ways to find new talent and build a
perfect team from the ground up.

4.     
Discovering
new clients and Opportunities

Of course, networking is also a great sales
tool, and in the first phase of your startup, you’ll need all the revenue you
can get.

5.     
Personal
brand exposure

Most importantly, the more you show your face
and the more you talk about your new business, the more exposure you’re going
to get for yourself and your brand. Meeting people, sometimes multiple times
and making your way into new forums will increase your brand recognition and
reputation within the community.

When networking, be sure to use online
platforms like LinkedIn and Twitter in addition to in-person meetings. Using
both will open you up to more connections, more opportunities and more
visibility for your personal brand.

 

Conclusion & Recommendation

In conclusion, networking
has different strategies and each company would set that strategy depending on
its business model and the market. But what’s important is that networking
benefits are not neglected by the company and a certain amount of funds should
be allocated for networking projects.

Given the technological
development that we are living now a day, business has become easier to the
sense that individuals from different companies can easily communicate with one
another on different online platforms. My recommendation to managers running
small, innovative firms is to stay up-to-date with what technology has to offer
with regards to networking.

Online networking is one of
the many time and cost efficient ways of getting introduced to the people you
are interested in speaking to and further attracting opportunities that could
grow your business to new heights. Since small firms are usually low on budget,
networking through Linkedin is also a method that should be considered for
individuals working in the company. I have seen some friends post about
achievements their company has done, or events they are attending and it does
attract many people. It keeps your network in the loop with what you are
currently working on, and shows how active the company is. Indirectly, this
would build the trust that small companies try hard to get from the public.

 

On the other hand, the
old-style networking, through events, conferences and talks are still very
effective but costly. Nevertheless, it is easier now as managers can know through
the internet when such events are happening and can get to know new interesting
events with the exposure of social media and the internet. In this way,
managers are sure that they are spending money on the right things, which helps
them to use their limited budget efficiently. Just make sure that this event is
targeted to the correct audience / people you are interested in approaching.

Partnership and
collaborations between different businesses are proven to be a successful way
of growing business if done strategically. I would recommend managers of small
firms to be on the lookout for such opportunities as it will definitely help
them grow their network. Moreover, it will help the company to get access to a
great database of customers as well as business contacts.

Last but not least, is word of mouth, it should never be underestimated.
My recommendation to small firms’ managers is to always speak about your
innovative business to your friends and family. Your personal network could
lead you to a huge network of their own if they believe in your business and
what you are offering. The chain grows bigger if you educate your employees on
such networking skills, which can give you an exposure worth money!

1 http://www.businessballs.com/business-networking.htm

2 http://www.markhamade.com/4-types-of-networking-groups-for-business/

3 http://www.huffingtonpost.com/jose-vasquez/5-reasons-networking-is-n_b_6523984.html

 

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