There is a business owner friend of mine who runs an IT consulting company. He offers technical consultancy as well as system integration services for larger more traditional businesses who are adopting digital technologies.
Over the past 3 years, his business has more than doubled in revenue and number of customers he acquired. The secret to this growth was his consistent and effective networking effort that gave him a steady stream of customers and high ticket deals.
He tells me that networking is an important component of an offline marketing strategy for a small business that genuinely pays dividends in the form of business growth.
Small businesses are very involved in their communities and with other other small businesses. Taking part in local community events is a great way to market a business and have increasingly successful networking outcomes.
What are the networking strategies for small businesses?
Networking straregies basically revolve around the outlook the small business owner has with respect to identifying opportunities to interact with others. The term ‘networking’ can be applied to a context, where two businesses have informal interactions and explore opportunities for collaboration.
There are many strategies that broadly get a small business a ‘foot in the door’ to network.
- Register and attend local business events – Attend local business events, trade shows, and conferences relevant to your industry. These events provide opportunities to meet potential clients, partners, and mentors.
- Join local business associations or business groups – Becoming a member of local business associations or groups such as the Chamber of Commerce can open doors to new connections and resources, these often also have some ‘secrets’ of the trade that are closely guarded by members.
- Stalk potential partners on social media – Platforms like LinkedIn and Facebook groupscan be powerful tools for connecting with other businesses, industry leaders, and potential customers. Engaging in industry-related groups and discussions on these platforms can increase visibility of your thought leadership.
- Sign partnerships with complementary businesses – Collaborate with businesses that offer complementary services or products. This can lead to referral opportunities and shared marketing efforts.
- Volunteer in Community Projects – Participating in community service projects can help you meet people from various backgrounds, including potential clients and partners. This will also put the word out that your business contributes positively to society.
- Offer to speak at events – Sharing your expertise at industry events or local business groups can establish you as a thought leader in your field. This can open doors to people reaching out to you or quoting you on public forums that can drive more awareness for your business.
- Build an online presence – A strong online presence through a professional website, blog and a social media community can attract connections from beyond your local area.
How does small business networking help drive business growth?
Coming back to the reference of my friend in the introductory paragraph, networking is a secret that many businesses who are successful adopt to grow their revenues. Its extremely well suited for services that are typically business to business.
In general, for a small business involved in services offered in a B2B scenario, networking can contribute to as much as 35% of annual revenues the business generates. This is however an average and can depend on factors such as the business sector, the country the business is located and the overall state of the economy to give boost to specific sectors.
To quote ‘Kyle Roof’, the co-founder of Internet Marketing Gold, he says “go where your customers and professionals are, meet them face to face so that you get into their consideration. Only if a potential customer knows that you exist, will they reach out to you for help”.
This quote perfectly sums up why networking is so critical for business growth for a small business. To put in place all the benefits that networking offers a small business to drive growth, here is a list.
- Increased Visibility and Brand Awareness
- Access to Business Opportunities by meeting new people
- Sharing of Knowledge and Insights
- Building Relationships and Trust
- Resource Sharing when you make complementary partnerships
- Increased Confidence and Skills for the business owner around other people
- Access to Advice and Support readily
- Attracting Talent through referrals can reduce costs
- Enhancing Your Reputation as an Expert as you build thought leadership
- Cost-Effective Marketing since ‘You’ are doing the marketing yourself
Does the business benefit with word of mouth marketing with increased networking?
Of the several business owners I have met during my decade plus experience of having worked with small businesses, more than 3 out of 5 business owners confirm that word of mouth marketing for their business has a direct benefit from increased networking they do.
Networking is a proven way to increase awareness, credibility and authenticity of your business which increases word of mouth referrals for your business.
There is enough data to suggest that success rate of converting a customer from a word of mouth referral is as high as 35% which is one of the best means of acquiring customers for free.
How can a business owner grow his network with other entrepreneurs that helps drive business growth?
As a business owner, you should always be on the lookout for opportunities to collaborate with other entrepreneurs and business owners to open doors and find avenues to grow your business.
There are some unique ways that a business owner can increase his network by working with other business owners.
Collaborate on Projects: Collaborating with other businesses on projects or doing local community initiatives together can build strong relationships. It can also provide mutual benefits in terms of shared resources and expertise.
Offer and Seek Mentorship: Engaging in mentorship, either as a mentor or a mentee, can be an effective way to build meaningful connections. It can provide valuable learning opportunities and deepen professional relationships with other business owners. Help other business owners in an area of your expertise.
Engage in Co-Working Spaces: Utilizing co-working spaces is a great way to meet other entrepreneurs. These spaces often host networking events and provide a collaborative environment. In the post covid world, co-working spaces are frequented by many people who are building a business. Proactively reach out, offer support and help.
Participate in Alumni Networking events: Tapping into alumni networks from your college or university or even your past employer if its relevant can be a valuable networking resource. Many alumni groups have dedicated platforms for professional networking, and fellow alumni often have a predisposition to help out their fellow graduates.
Participate in Business Competitions or Awards: Entering business competitions or awards can provide an excellent opportunity to meet other ambitious entrepreneurs and industry professionals. Even if you don’t win, participating can increase your business’s visibility and open up networking opportunities. You may compete in the competition but can become collaborators outside.
What should small business owners look for as outcomes during any networking event?
Its extremely easy to get lost in the flurry of meetings you do during all networking events that you participate in as a business owner. At times, you may need to take step back to understand what are the outcomes you are driving for your business.
Too much of networking can be a time sink and you only have 24 hours in a day. Often you must reflect and check if the following benefits are flowing to your business after networking.
Gaining Industry Insights: Networking events are excellent opportunities to learn about the latest trends, challenges, and opportunities in your industry. Are you gaining any new insights and trends in your industry that you can adopt?
Identifying Potential Partners or Collaborators: Look for opportunities to collaborate with other businesses that complement yours. How many potential partners or collaborators have you identified from the last 5 networking events you have been to?
Discovering New Business Opportunities: Stay open to unexpected opportunities. This could be a new business venture, a side project, or a new market that you hadn’t considered before. Look at how many potential new business opportunities you have identified.
Enhancing Visibility: Networking events offer a platform to increase your business’s visibility. Introducing your business, participating in discussions, and contributing valuable insights can help in building a reputation as a knowledgeable and engaged business owner. In subsequent networking events, do a dip-stick check to see if people recognise your business or brand.
Gathering Feedback and learning from your peers: Use the opportunity to talk about your products or services and get feedback. This can be a form of market research, providing insights into how your offerings are perceived and areas for improvement. Hearing about the experiences of other small business owners can provide practical advice and lessons learned. This peer learning is invaluable as it comes from real-world experiences and can help in avoiding common pitfalls
Once you take a look across these parameters at the time that you have invested in networking, you can see how much progress you have made and how much progress is yet to be made.
Key mindset a small business owner needs to adopt while networking with other business owners and potential customers
The key mindset a small business owner needs to adopt while networking with other business owners and potential customers revolves around the concept of “value-centric connection.” Networking is not just about expanding a business network; it’s about building meaningful relationships with people, where each interaction adds value to both parties involved.
Small business owners should view networking as an opportunity to learn from and contribute to the collective knowledge and experiences of other people in their network. It’s about connecting with people on a level that goes beyond mere business transactions. This mindset encourages genuine interactions, making it easier to establish trust and long-lasting relationships.
Every person you meet is not just a potential customer or a business contact but a source of knowledge, inspiration, and opportunity. Business owners should approach networking with the intention of being helpful and offering assistance, rather than solely focusing on what they can gain.
This approach to connecting with people tends to yield more fruitful results, as it fosters an environment of mutual support and collaboration within the business network.
Every networking opportunity should be approached with an open mind. People come from diverse backgrounds and can offer fresh perspectives that might lead to innovative business ideas or strategies. A business owner’s network is a rich tapestry of potential resources, ideas, and collaborations, and tapping into this network requires an attitude of openness and curiosity.
Consistency is key. Building a strong network and fostering relationships with people requires ongoing effort. Regularly engaging with your network, offering support, sharing insights, and staying connected with people helps in maintaining a robust and active business network. It’s about nurturing the connections you make and valuing the network you build.
A business owner should also be willing to allow his team to network on their own terms. They can bring in a lot of potential collaborators, add talent and give you a better pulse of the business.
How does the community, its people and other small businesses plan for networking success in the events they organise?
Many businesses are part of communities that pool resources together to reach out to a larger audience to build a network so that everyone stands to benefit. While communities take these initiatives, its critical that they keep the following strateges in mind to get their desired outcomes.
Identify Clear Objectives: Successful networking events start with a clear understanding of what the community and its businesses want to achieve. This could be increasing local business visibility, fostering collaborations, sharing industry knowledge, or simply building a stronger business community.
Targeted Invitations: Knowing the audience is crucial. Events should be tailored to attract the right mix of people who can add value to each other’s businesses. This may include local entrepreneurs, potential investors, customers, and experts from specific industries.
Collaborative Planning: Involving various stakeholders in the planning process can lead to more effective and inclusive events. This includes local businesses, community leaders, and potential attendees. Collaboration ensures the event meets the needs and interests of a wider audience.
Inclusive Environment: Ensuring the event is inclusive and welcoming to all members of the community, regardless of their business size, industry, or background, is key to fostering a supportive and diverse business network.
Measuring Success: Defining and measuring success metrics such as attendance numbers, the number of connections made, or subsequent business collaborations helps in evaluating the event’s impact and planning future events more effectively.
Follow-up Activities: Post-event follow-ups, such as thank you notes, surveys, or newsletters, can keep the momentum going. Sharing a list of attendees (with their consent) or creating online groups can facilitate ongoing networking and collaboration.
As a community does these things, the probability of getting long term success from networking events gets higher.