It's who you know...
From specific association networks to broad business groups, there are so many opportunities for SME owners to network. But does networking actually work? Catriona Pollard investigates.
Lynette Palmer from national networking group, Women's Network Australia, believes networking works well for SMEs, but just turning up isn't enough.
"Building your professional networking contacts is not about attending a few events and flicking your business card around. It takes time and effort and it will take a good two years to start seeing measurable results consistently flowing into your business.
"Networking isn't about acquiring new business; it is about surrounding yourself with a support network for your life in general. I have never met anyone who said they have too many contacts," says Palmer.
Karen Andrews from Shine Sales Solutions agrees. "Running a business can be an isolating and stressful experience, but when you network you learn so much about different types of businesses and what is happening in the business community."
Networking can also be the most cost effective way of reaching hundreds of potential clients, which is particularly worthwhile for SMEs with tight marketing budgets.
"I network to help me market and advertise my business. With the absence of a marketing or advertising budget, I have to find different ways of finding and connecting with potential clients," says Andrews.
Essential for expansion
Andrews has found that networking is an essential element to her business development program because "instead of waiting for people to find you, with networking you are taking control of the situation and finding them".
"I get access to a room full of people and, by simply chatting with them, I can discover if they have a need for services like mine. The more people who know me and my business; the more people will contact me when the need arises," says Andrews.
From a business development perspective, it is a good idea to network with potential clients. For example if your target market is small business, then participate in groups for small business owners such as your local chamber of commerce or Sydney-based The Last Thursday Club. The Women's Network Australia is predominantly small business and is currently in Queensland, Victoria and New South Wales and has just announced it will expand to South Australia and Tasmania.
Palmer suggests that you should always belong to your industry specific network – such as one run by the professional association you may belong to – and also a non-industry specific network. "Doing this means you can keep up to date with your industry and competitors' knowledge, and a nonindustry network will expose you to a good cross section of business people."
For example, in Melbourne there is the Australian Information Industry Association Victorian network which connects member companies in Victoria to a network of local contacts, events, information and business opportunities. To find one in your state, look up your industry association or a national group that has local chapters.
Like any marketing activity, networking needs to be consistent and long term. Palmer has found that many make the mistake of not networking when everything is going well for them. "When the wheels fall off they have no contacts or support and need to start relying on people with whom they have never bothered to build a relationship."
For best results, go alone
The key to good networking is to go alone. "Do not take someone with you for support as you will inevitably use the event as a catch up. If you invite a colleague to attend with you, split up during any networking period and catch up after the event," says Palmer.
"Also a savvy networker knows that networking and building relationships is about taking the time to find out about others, and from there working out if there is any synergy.
"Good networkers also always follow up those they meet. Andrews takes this one step further, setting a goal to connect with people. "Networking for me isn't about collecting a pile of business cards that I probably won't do anything with. I set a goal for each event to get two business cards with the invitation to contact them and arrange a coffee meeting so we can chat in more detail."
Palmer believes that not everyone can see the big picture of networking. "If you're not willing to put in the hard yards and build relationships, you will spend most of your time attending events in the hope that one day a potential client will be coincidentally placed at your table. The true reward of networking goes well beyond just attending an event."