Real businesses don’t join networking clubs because networking is a significant investment of time and cannot deliver a reasonable return on that investment. It does not work for real businesses! In my opinion a ‘real’ business is not a sole trader. Many sole traders make tremendous incomes but do not require the sales systems demanded by more sophisticated, larger businesses. If you want your business to become larger you will need a robust sales process.
Organized paid networking is not part of a serious sales plan.
There are lots of networking clubs that promise an endless stream of prospects for business but, in fact, organized networking groups such as BNI or 4 Networking are filled with micro businesses and self-employed that cannot deliver significant opportunity for any growing business. These groups can play a role for the very small self-employed business. The problem is that ninety-nine percent of the membership of these networking clubs only employ the owner – there is no business opportunity! The result is a breakfast meeting filled with struggling businesses desperately looking for a prospect where few or none exist. I have been to dozens of these meetings and although they suit many micro businesses they provide little value for any business wishing to grow. These groups typically suit the life insurance salesperson, chiropractor or massage therapist looking to build a small local following.
Why do real businesses not attend organized networking clubs?
Established businesses develop relationships directly with a target business and do not depend on matchmakers or chance meetings at breakfasts or cocktail parties to develop a ‘friendship’ that will later develop into business. Doubt this? You will rarely, if ever, find an established business with more than a half a dozen employees at any organized networking event. An established business has a well-developed sales and marketing plan which provides the plans, resources and tools to sell effectively in the marketplace. I have never met a sales manager who encourages his salespeople to attend networking groups – they are required to develop their own leads and close business. In other words they must sell!
Established businesses do use networking but only with a focused and determined strategy connecting with similar businesses at industry events and business clubs. Even at business clubs such as the London Chamber or the IOD small and large businesses do not mix in the same circles. You can go to every networking event sponsored by the London Chamber and you will never meet the Patron members. The big fish and the small fish are swimming in different tanks!
How do you connect and do business with larger businesses that have the kind of budgets that will allow you to transform your business?
You need to prepare yourself and your business and professionally target larger businesses. This means you need to develop the selling skills and strategy to effectively locate, connect and present. Then you need to sell and close the business. If you don’t have these skills then invest and build the knowledge to play in the real game of business!
Does paid networking have a place in business? Sure, the typical high-street businesses ‘butcher, baker, candle stick maker’ can build solid local business and contacts. If that is your business model a networking group for the first year of business makes sense. I have gained real business from attending these networking clubs but the pool of prospects is not of the quality to provide a reasonable stream of prospects for any but the smallest of businesses.
A big mistake businesses make is to believe the myth that it takes two or more years of networking to get results – this is a lie to get your membership fee! If you have a compelling business offer people will do business with you today!
Networking is fine, has some value for the micro business and can form part of a sales process but does not replace selling. If Networking works for you then you should keep doing that but if you are frustrated with the results you may want to consider finding a deeper well.
How do I approach new business development? I target the businesses that I want to work with, pick up the telephone and ask for a meeting. This is selling and it works!
The very worst mistake small businesses make is to hide from real marketing and selling by keeping busy networking – many are simply afraid to sell!
Don’t do this to your business.