Many small to medium business enterprises are taking a battering in the current volatile economic environment.
MANY small to medium business enterprises are taking a battering in the current volatile economic environment. The reality of this is reflected in the ‘Business Failures and Start-ups Analysis’ report for the December quarter 2011 by Dun & Bradstreet.
The disturbing facts are that Australian small business failures increased by 57 per cent over the year. Medium-sized businesses reflected a similar trend with a 40 per cent increase in failures.
These statistics are coercing SMEs into exploring cost-effective ways to generate new business opportunities as a means of improving viability and profitability. Increasing numbers are turning to business networking as a method of achieving this. Business networking is about business owners becoming proactive and seeking out people who may have the capacity to assist in the growth of their company. Central to this is relationship building.
Networking is not haphazard; it is considered and focused and needs to be actively pursued. It is critical that a business owner embarking on this course of action has an in-depth understanding of what the business is about, what it has to offer and which market sector is being targeted.
Further, the business owner must then have the ability to clearly articulate these points. It is also to the great advantage of owners of SMEs if they have a regular forum within which they can speak about the specifics of their business offerings to other like-minded business owners.
Business Networking International is one of a number of business networking organisations currently operating across Perth. I started BNI in the US almost three decades ago. My desire to assist a group of friends generate business referrals was the catalyst for the development of this organisation.
In my role as a business consultant I realised that the most effective way to develop a business was via word-of-mouth referrals. This fundamental notion underpins BNI.
Significantly, this organisation created over $23 million worth of business referrals for Western Australia businesses last year. More than 90 per cent of these members are SMEs. The primary aim of this organisation is to assist members find and exchange qualified business referrals and develop new business through word-of-mouth marketing techniques. The emphasis is on businesses that have the capacity to grow such as SMEs and whose owners understand the pivotal role of referrals and the importance of strong business relationships.
The philosophy underpinning BNI is that ‘givers gain’ and members are empowered by the understanding that by giving to others they will receive considerably more in return in the business context. This in effect is what is meant by ‘changing the way the world does business’.
Traditionally, businesses are takers and hunters – BNI’s goal is to make the business world understand that being ‘givers’ is a much better strategy for business growth. This is a considerable paradigm shift.
How to become a better networker
The following tips are intended to provide a frame of reference for referral networking.
• Ensure a clear understanding of what your business does, where you want it to go and what separates the business from the rest of the pack. Develop a specific and concise statement that encapsulates this information, including recent achievements. Delivery should be relaxed yet professional and take no more than 60 seconds.
• Identify your target market. Often a review of previous clients is a good starting point. Specific knowledge of your target businesses will provide an important focus for your efforts.
• Focus on building relationships. People naturally prefer to do business with people whose company they enjoy. Take time to develop relationships and ensure initial meetings do not become off-putting sales pitches.
• Develop attentive listening skills. Accurate retention of information is critical for passing on quality referrals.
• Share your business statement or ‘elevator pitch’ with quality business contacts. A formal network context is often a good starting point.
• Provide timely follow-up in provision of requested or relevant information after initial business contacts. This ideally should be done within 24 hours but no longer than 48.
• Givers gain – be prepared to actively pass on the knowledge other business owners have shared with you. Do not expect anything in return.
It sounds deceptively simple, however there are prerequisites for its success. Business networking needs a proactive mindset on the part of business owners. Considered planning in the formulation and implementation of a clearly defined strategy is critical.
Ivan Misner is the founder and chairman of BNI, the world’s largest business networking organisation
Contact Ivan on www.bni.com/ | http://www.facebook.com/IvanMisner.BNIFounder