Running several business networking groups in Colorado I do have a lot of great conversations about business networking. One of those conversations inspired me to write this article. The conversation was about whether or not a business owner ever outgrows the need for networking. As a business coach, working with business owners in all stages of their business I do have a certain perspective on this question that I wanted to share. But first of all we need to somewhat define business networking:
What is Business Networking?
Business networking is the practice of establishing mutually beneficial relationship with other entrepreneurs, business owners or professionals. The benefits reaped from networking can range anywhere from introductions to new customers, to meeting potential referral or strategic partners to learning new skills or gaining insights into specific industries. In this article we focus on business networking for small business owners vs. networking for career professionals who, for example, use networking to connect with future career opportunities.
What Are The Benefits of Networking
Any business owner who has been in business for a while knows that nothing worthwhile is ever accomplished just by oneself. Inevitably you will need a team of people to make things happen – whether that is delivering your product or service to your customer, growing your company, becoming a better business. You will always need other people to help you accomplish your goal. And that is where you never outgrow the need for networking – as long as your goals are changing, you will always have a need to find the right people who can help you accomplish those.
Different Stages of Business And How They Relate to Business Networking
Every business goes through different stages, and during those stages the business owner as specific goals. There are many business stages models, but essentially it comes down to some form of these major milestones:
· The Development Stage
· The Start-up Stage
· The Growth Stage
· The Scaling Stage
· The Maturity Stage
· The Succession Stage
As a business owner moving through these stages you will see that your focus and priorities change and therefore the people you want and need to connect with. Let’s look at a probably journey of a business owner.
The Development Stage
The Development stage is primarily defined by information gathering and planning. You might look to connect with other owners who are running a similar business like you are planning to have and you want to get some insight from them. You might also work with free resources provided from organizations like Score or the Small Business Administration.
The Startup Stage
Then you have enough information and a solid enough concept to take the plunge and start your business. Often there are some outside finances available to at least help you get through the first few months. Initially your focus is on getting the essentials in place. Depending on how much funding you have available you either do most of the work yourself, or you can hire some professionals to help you with things like finetuning your offering, creating a website, basic marketing materials, a way to collect payments etc. But sooner or later you are focused on one thing, and one thing only – SALES.
Usually, you don’t have any brand recognition yet, your website is not yet attracting and converting leads, and you don’t have anyone who is sending you referrals, so you are it. It’s up to you to generate the leads and sales that your business needs. Because you don’t have (m)any clients yet, you still have time, and sooner or later you go out to drum up business. Next to cold calling (which requires only a telephone), networking also has a very low barrier of entrance.
In any major city you will find hundreds of so called networking, leads or referral groups. While most of those groups present themselves as being about building relationships, the reality is that most of the people attending those urgently need sales, and that is what you find there: Lots of people who want to sell you something.
But with enough time invested and honing your presentation and sales skills you will ultimately find some people who will buy your service or product. On to the next stage.
The Growth Stage
Once a business owner comes out of startup mode, which I loosely define as reaching break-even point, the focus of the business is still very much on growth, but with the added focus on servicing the existent clients and figuring out the key resources, key activities and key people needed to deliver a first-class customer experience.
In terms of networking owners in this stage usually are responsible for generating sales, so they are looking for actual prospects, but now also focused on building strategic referral relationships (because they don’t have the time anymore to go low producing leads groups) and possible joint ventures.
At this stage the business owner also understands and puts focus on becoming a trusted advisor to their clients and needs to establish relationships with other professionals who serve their target audience but in a non-competitive way.
The Scaling Stage
How much time a business owner spends in the growth stage is depended on whether the owner will continue to dedicate time to working “on” the business or whether they are letting themselves be fully consumed by customer related work.
A business can stay in the “growth stage” for the entire existence of their business. Many owner-operator businesses stay at the “growth” level and never move on to the next stage. But if the owner is disciplined, gets the right help, and puts the right systems and people in place there is another level of growth possible for the business – scaling exponentially.
This could look like opening multiple locations, licensing their methodology or franchising. During the Scaling Stage the focus on networking is around getting the right kind of help to get the business to the next level.
You are looking for true experts with specific industry experience. Most likely you have a sales team now and don’t need to focus on individual sales. Your networking usually happens at Expos, Conventions and the owner often joins a Mastermind or Peer Advisory Group.
Similar with the Growth stage the Scaling stage can vary in length, often defined by how hard a business owner wants to “push” after several years of getting to this stage.
The Maturity Stage
At this stage is when the business owner truly reaps the benefit of all their hard work. They have built a business that is successful, profitable and predominantly owner independent. In this stage the focus usually is on how the business can make an even bigger impact.
Areas of focus might be how to give back to the community in a more meaningful way, or how to make the business model long-term sustainable, leaving a legacy behind. Business networking is focused on philanthropy, creating win-win situations for long-term stakeholders and supporters of the company. And lots of leadership training for the existing management and leadership team.
The Succession Stage
Eventually the owner needs to think about when and how he or she wants to exit their business. Exit and succession planning become the focus. Now the business networking focus might shift to building the right team to help with the transition. The other area of focus might be to cultivate a short list of potential buyers of the company by strengthening relationships with key suppliers, customers or even competitors.
Where does Network in Action Fit in?
As a Community Builder for Network in Action I would say that Network in Action primarily serves the needs of people who are in the growth or scaling stage. The business model is such that we offer effective networking with other established business owners and professionals.
We are not a free or low-cost weekly leads group that is time-consuming and primarily filled with people who urgently need to drive sales. Our focus is on helping business owners build strategic referral relationships either through members of our groups or their network.
We cut down on the time requirement of weekly meetings, because our members have customers to serve and a business to run. Instead, we offer just the right amount of structure and support to help owners meet their sales goals while they are working on building out their business with the right kind of people, processes, and systems.
We offer opportunities for networking, for learning and for getting access to the right kind of people that can help their business grow. We do find that for business owners in this stage some kind of structure is still helpful, especially because their business is pulling on them in so many ways.
Personally, I love helping people in this stage, because they have proven that they have what it takes to run a business, and with the right type of help and connections they are now on the verge of building something truly amazing. And we’d like to be a catalyst for that.
If you’d like to find out more about Network in Action in Denver, Colorado you can visit www.NIA-Denver.com or contact me at simon@networkinaction.com. I would love to hear what your goals are and if we might be able to support you in achieving them.