What Is Business Networking & What Are the Benefits?
Why Business Networking Is Essential for Success
Business networking is the process of establishing a mutually beneficial relationship with other business people and potential clients and/or customers. The primary purpose of business networking is to tell others about your business and hopefully turn them into customers.
The Benefits of Business Networking
- New contacts and referrals - The most obvious benefit of networking is to meet potential clients and/or generate referrals which you can then follow up on to hopefully add to your client base. Networking can also help you identify opportunities for partnerships, joint ventures, or new areas of expansion for your business.
- Visibility - You need to meet and communicate with potential clients and business partners on a regular basis to maintain your business relationships. Attending business luncheons and other networking events raises your personal profile and can help keep you front and center in the minds of the right people.
- Staying current - In an ever-changing business climate it is important to keep up with the target market conditions as well as overall trends in your industry. Knowing the market is the key to developing a successful marketing plan. Attending seminars and networking with your peers and business associates on a regular basis will help you stay current.
- Problem solving - In addition to the potential of increasing your business you can often find solutions to your own business problems or needs by networking. For example, if your business needs the services of a bookkeeper, accountant, or lawyer you may find the ideal candidate via networking, or if your business needs equity financing for startup you may be able to find an angel investor or venture capitalist through networking channels.
- Sharing knowledge and experience - Networking is ideal for expanding your knowledge by taking advantage of the viewpoints and prior experience of others. If for example, you are thinking of getting into the import or export business you may be able to get some valuable advice from someone else who has done similar business internationally. Taking advantage of the experiences of others before you invest time and money in a particular venture can be invaluable.
- Confidence and morale - Most business people are optimistic and positive. Regularly associating with such people can be a great morale boost, particularly in the difficult early phases of a new business. If you are not naturally outgoing, regularly meeting new people can also boost your confidence and on a personal basis you may form new friendships with like-minded people.
The purpose of business networking is to increase business revenue - one way or another. The thickening of the bottom line can be immediately apparent, as in developing a relationship with a new client, or develop over time, as in learning a new business skill.
Network the Old-Fashioned Way
Meeting people in person seems old fashioned in the digital age, but wherever possible you should network face-to-face. Social media platforms such as Facebook, LinkedIn, and Twitter are excellent ways to communicate with customers and business associates, but they do not substitute for meeting people in person. A lot of local business is still done on a handshake basis, and the best way to network with other local business owners and entrepreneurs is through business groups.
Business Networking Groups
The best business networking groups operate as exchanges of business information, ideas, and support.
The most important skill for effective business networking is listening; focusing on how you can help the person you are listening to rather than on how he or she can help you is the first step to establishing a mutually beneficial relationship.
Most cities and towns everywhere have local business groups that meet on a regular basis. In North America the largest business group is the Chamber of Commerce. The U.S. Chamber of Commerce was formed in 1912 and the Canadian CoC soon afterwards, in 1925. According to the Canadian Chamber of Commerce website, the CoC's primary mandate is to "advocate for public policies that will foster a strong, competitive economic environment that benefits businesses, communities and families".
Typically, in addition to other member benefits such as discounts from corporate members the CoC regularly holds luncheons, workshops on business topics, and other networking events, providing members with many opportunities to connect with other organizations.
Also Known As: Networking.
Examples: Jim learned a lot about how to improve his customer service through his business networking group.