Networking in business can mean two things.
One is, of course, the quantitative technical aspect of installing an efficient system of Local Area Network (LAN) in your office or a Wide Area Network (WAN) among your various branch offices. A systematic and technologically sound network has a very big role to play in creating streamlined processes, better management of data and user-friendly accessibility for employees in your business.
But in this article, we are going to talk about the top 5 advantages of the equally important qualitative aspect of networking in business – which includes networking with other business owners, customers, dealers and peers.
Especially for small and growing businesses, which do not have a marketing department or lots of money to spend on advertising, networking can be a key for expanding the business. For the CEO of a small business, investing in networking often serves as the biggest gateway to getting leads, referrals, new business and contacts. Let’s take a look at the top 5 advantages of networking in business:
1. You get a feel for the local business environment
Especially in the context of your own small business, it is vitally important to understand how the local market behaves, what are its key demand areas and its most effective price points keeping in mind the demographic and psychographic profile of the area. Networking with other peers in your local business area and associations of local business owners and customers helps you get a clearer picture of the demand and supply graph of your local business area.
2.Keep updated with the current happenings in the local business environment
No business can grow in isolation. Networking with other business owners and associations helps you keep updated on the latest local business news, new regulations, incentives or tax reliefs offered by the local government to small businesses and the changing customer demands.
Besides, it is important to have updated knowledge of current business trends to be able to spot emerging business opportunities. You can accordingly fine tune your business plans and marketing strategies to make best use of the developments.
3. Gain qualified leads and referrals
It is said that, on average, 70% of all new business is gained through word of mouth and positive recommendation. Irrespective of how much money you invest in advertising or marketing, the best way to increase your business is by getting solid referrals or sales leads that come from known contacts.
Once you build a network of good, reliable contacts, you will find your contacts passing on business leads to you, which you will be able to close more quickly than those coming from advertising. People like to refer those whom they know, like and trust.
4. Get useful business tips and advice
A good network of contacts is like an investment in executive coaching. You will find that the best business advice and tips come to you from your contacts. People with whom you have built positive relationships would gladly pass on effective and honest advice to you.
Especially your peers or business owners who are in non-competing businesses are great sources of useful tips. One proven way of building a great network of contacts is to join a CEO club or CEO association where you can interact with experienced peers and business owners on the problems you are facing or the strategies you would like to apply.
Networking with peers in a CEO group or CEO club who will give you sound and honest advice is one of the best ways of receiving helpful business insights. Your contacts and peers may have experienced similar problems to yourself and can point you in the right direction.
Also, make it a regular exercise to attend relevant business seminars and conferences where you can establish a number of potential new contacts.
5. Unlock new business opportunities
Building a growing network of business associates, business contacts and peers is like opening yourself to a larger world of new ideas. You may be running a small business but that does not mean you should limit your ideas, vision and plans for your business within narrow confines.
As you meet with new business contacts, you will be amazed to find yourself being exposed to new business ideas, new market possibilities and new potential for expansion which you otherwise may not have thought of.
Business networking helps you in many other ways. It develops your communication skills and confidence in meeting with new people. Besides it also gives you unique opportunities of being of help to others, just as others have been to you. It may hold the key to your business’s expansion and success.