What is business networking and why is it so important?

What is business networking?

Business networking is the process of building up mutually beneficial relationships with other businesses and prospective clients in the hope that they can benefit your business.

Growing your business means building and maintaining productive relationships, not only with your growing base of customers but also other professionals and decision makers.

No business operates in a vacuum, and other traders and business people can be an invaluable source of inspiration, support, advice and opportunities.

Why is networking important for your business?

It’s easy to get caught in a bubble when running a small business.

By connecting with your peers in the business community, you can make sure that you are keeping up with the latest developments.

In particular, it’s important to ensure that technological advancements don’t pass you by while your competitors benefit from them.

Changes in regulations are also important to identify as early as possible. You can pick up a huge amount of useful information ‘on the grapevine’.

Furthermore, business networking gives you access to a far wider knowledge base and a richer source of expertise.

Yes, you can search out what you want online – but personal recommendations and contacts are also highly valuable.

You may also achieve special deals or favours, if you’re in a position to reciprocate.

Types of business networking

The best network is achieved organically, in environments specially designed for that purpose.

Often business networking will take place in the context of some other event, such as a seminar or conference, even if networking is the real reason why most people are there.

Here are some of the most popular arenas for networking.

Informal networks

Various local business groups exist where local business people simply gather together, regardless of what sector they may be in.

Such groups can be useful for seeking seek general advice and support from your peers, or discussing wider issues such as government policy.

However, they can be less effective for finding business contacts, since they’re not industry-specific.

Professional associations

These groups bring together professionals from a specific sector to address the challenges and opportunities associated with it.

Becoming an active member of one of these organisations can boost your professional standing and increase your brand recognition. It can also help you recruit the best and brightest from your industry.

Strong contact networks

These are established to help members drum up more business.

If you want to find additional clients or create more opportunities, these are the groups to seek out.

Community groups

The focus of these groups is on serving the local community rather than helping members find more work, but if your business provides services that can be used locally, such as landscape gardening or plumbing services, you can attract a substantial amount of business in this way.

You also promote yourself to the local community while helping to improve your area, so it can be win-win.

Conferences and seminars

Most conferences will have networking events or areas. Some will even allow you to book out rooms so that you can set up meetings with other companies before or during the event.

Industry conferences can attract a wide range of companies, from well-established brands to eager start-ups, so even walking around and handing out your business card can yield real results.

The benefits of networking in business

Properly planned and executed business networking can help you to:

• build relationships with new partners
• create new business from referrals
• find out more information about your competitors
• improve your recruitment
• promote your business throughout the local community
• stay on top of industry developments
• seek advice about the problems you are facing
• learn about new technology or business strategies that could in turn help your business become more efficient and productive

Always remember that business networking is not simply about getting new clients and increasing your sales.

It can make your business stronger in a number of other important areas and help you operate more effectively.

Merely expanding your network is useful in itself, as this makes you more attractive to other potential networkers.

For example: A may be of no interest to B, but if B knows C (and A needs C) then B becomes very useful indeed.

Tips for networking

Getting the most out of business networking requires a plan.

Your peers are also looking to benefit from networking, so think first about what you have to offer them.

Where possible, research events in advance and try to find out who may be attending (or is likely to).

Then draw up a ‘hit list’ of people you most want to speak to, and think in each case about how you’ll make yourself interesting and unforgettable to each one.

• As easy as social media makes contacting people, prioritise face-to-face meetings as it remains the most effective way of establishing a relationship.
• Don’t treat networking events as a place for you to gain contacts without giving anything back. Share skills, ideas and support.
• Quality is always better than quantity – you will benefit more from one productive meeting than 20 rushed and poorly-prepared ones.
• Develop a 60 second elevator pitch that outlines your core business functions and benefits, then practise it so it comes out naturally.
• Be ready to give examples of work you’ve done or clients you have worked with.

Perhaps the most important business networking tip is: follow up. Don’t leave business cards to gather dust until you need that person – they’ll have forgotten you.

After an initial conversation, be proactive about developing the relationship.

Meet for coffee, connect on social media, send them a free sample or an invitation to your next event – anything to fix you in their mind.

Business networking can be labour-intensive, but if you work at it your list of contacts can become one of your most valuable ‘soft’ assets.