Networking Effects on Building New Business Relationships
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Networking Effects on Building New Business Relationships
Introduction
Networking is a concept that has been gaining popularity over a number of years when it comes to areas like career advancement and it is no exception to improving business performance. The purpose of the study is to examine the effects of networks on the establishment of new business relationships. Here in essence the aim is to explore how networking can be explored so as to advance the performance of an organization through generation of growth in sales, profits, reputation by examining the networks that are existence and how they are utilized in daily business operations.
LITERATURE REVIEW
NETWORKING AS A BUSINESS TOOL OR MARKETING TOOL
People buy from people. For centuries, most businesses attribute ‘networking’ as their number one driver of sales. The network approach is a much older discipline that has been studied in the context of organisational research since the 1930s and is rooted in the concepts of sociology, anthropology, and role theory (Tichy et al., 1979, Nohria and Eccles, 1992, Parkhe et al., 2006). Networking is a business and personal marketing tool that will deliver an overall business and marketing strategy. In marketing terms, networking as a tool, will show one where to find future business opportunities rather than immediate results. Off course, established networkers do achieve immediate results, which is why all business people should be good at networking. Networking is one of the most essential personal skills for business people, but it is extremely important for entrepreneurs. Communication and strong presence in the entrepreneurial ecosystem are productive approaches which will help you along your way to building strong relationships with other entrepreneurs from different age groups, nationality and fields of interest. Hoang and Antoncic (2003) define networks as consisting of a set of actors (nodes) and a set of relationships (links) connecting these actors. Networking is particularly well-suited to any business focused on consultative selling, trusted advisors, key account management programmes, account-based marketing, and referral marketing and localized markets. It also works incredibly well if one is looking to break into new markets, learn about one’s competitors, and deepen one’s knowledge about clients and other forms of market research. In fact, in any area where it is important to know what is going on inside a clients business and or the markets one works in, networking works brilliantly well. In the fast paced modern world of today, cultivating human relationships is very paramount. Networking has been a business staple since selling began. It has probably been a part of the business world. This networking can either be through face to face meetings or through different forms of communication such as phones, emails, Skype, WhatsApp and others. Networking is and hopefully always will be a fantastic way of developing relationships. Networking is about interacting with people and engaging them for mutual benefit. It can help one establish a new business or grow an existing one. One can also use networking as a tool for finding investors, customers, staff, suppliers and business partners with minimal cost to a business. The networking can be done face-to-face at social events, conferences and through industry associations. It can also be done online, through sites such as LinkedIn and Facebook.
The more ways one networks, the more the business will benefit. It is common for people to feel apprehensive about networking, but it is a skill one can and should develop with practice. The more networking one does, the easier it will become. It can happen naturally, but one can also take a strategic approach. Uzzi and Dunlap 2005 have put three different types of networks. These are: operational, personal and strategic. Networking does not work by accident. It depends on how one does it, when and with whom. If it is done well, with a strategy, it will bring benefits to a business, both now and for a long time to come. Good networkers achieve amazing results. Watson 2007 states that 90% of new business comes from word-of-mouth recommendation, referrals and direct networking. In a competitive situation, being well-connected gives one an edge over other suppliers because of an established relationship with the clients. Network theory suggests that network relationships provide access to otherwise unavailable resources and information and may thus have a positive effect on firm performance (Watson, 2007). Business networking events organized around the world bring together extraordinary groups of highly-skilled and talented entrepreneurs who are united around the idea of communication, sharing, creating and developing ideas and last but not least meeting with potential investors. These events attract people with different experiences. All these people are looking for connection, inspiration, advice, opportunities and mentors. Networking is powerful in many different ways. Not only entrepreneurs will feel inspired and motivated after attending specific events or meet ups, but also many exceptional opportunities can occur if they impress potential investors or business partners. One has to present themselves and their firm the way they want other people to see it in order to create honest fundamentals for one potential business relationship.
It is important to approach networking as any other part of a business. There should be a plan with specific goals that has to be followed. One has to know when, where and why they are going to an event, what their goals are and what do they want to achieve with their attendance to this particular meet up. Time is very crucial for an entrepreneur and one must have a clear vision of what they are going to spend it on. One has to cautiously select their options and choose the one that will bring the most advantages to their business. It is widely known that connections come as a result of other connections and as usual the hardest part of the whole network-building process is the start. One has to be active, memorable, to provide value to the others with their presence and to make them want to stay in touch with them. One has to impress, to be remembered and desirable for future business relations. Once one meets the people they wanted to establish relationship with keep this connection going after the event. They have to stay in touch and manage to continue the actual communication which will be foundation for strong relationship and network.
An entrepreneur should not underestimate the power of local networking and attend networking events and meet ups around you. Knowing the local community has great advantage and one never