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Business networking — formal and informal

Tuesday, July 14, 2009
Networking is important to your business. Image: Getty
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By Diana Clement
MSN NZ Money writer

Network or perish! Not only is the phrase the title of a book, it's sage advice because networking is essential for small businesses.

The great thing about networking is that it can cost nothing more than your time. It can bring you customers and alliances, help keep you up-to-date with your market and help you remain sane.

Just watch a real-estate agent or life-insurance salesperson in action to see how beneficial networking can be: good ones network constantly in formal and informal ways.

Informal networking
Informal networking can be done through coffee groups, friends, family, former colleagues, sports clubs, churches, Toastmasters and other organisations you belong to.

Formal networking
Formal networks may include organisations such as Rotary, Lions clubs, industry and business networking groups and anywhere that brings them into contact with lots of people.

Estate agents and insurance salespeople will take the opportunity to bring up their business with everyone they meet. The logic is that the next time you need to buy or sell a house or update your insurance you'll remember the friendly trustworthy person you met at an event you attended. All business people could take a leaf out of their book.

Networking opportunities can include:

Those business owners who network best have a written plan. That plan outlines:

  • The types of business owners/professionals they need to network with;
  • Goals for networking;
  • How to work your network, such as sending newsletters, organising regular meetings and so on;
  • The number of contacts they need to make each week, month or year; and
  • A follow-up plan.

Networking guru and author Robyn Henderson recommends channelling between 5 percent and 10 percent of income back into networking, depending on the type of business you're in.

There are online networking opportunities through websites such as LinkedIn.com. Or you can set yourself up as an expert, answering questions on forums related to your industry.

Finally, if networking doesn't come naturally it can be learned. There are plenty of books on the subject and a mentor or coach may help you overcome your fears or inhibitions.

Why network?

  • To market yourself;
  • To keep up collegial contact with like-minded professionals;
  • For an ideas springboard;
  • To have people in the industry to turn to for advice in difficult times;
  • To provide your business with leads and referrals;
  • To mentor and coach younger people in the industry; or
  • To learn from more senior people.

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