Networking: Good or Evil?

My sister Annie inspired me when I decided to start my own business.  She has owned her business, Road to Wellness, for close to 10 years; and while I am sure that she will contest it has not always been easy, she has been successful! Every time we get together, we eventually talk about business. Last fall, we engaged in a conversation around networking; good or evil?

In particular, we discussed an opportunity that Annie had been presented with. She was feeling pressure to participate and it didn't make sense for her, at that moment in time. Our conversation was not new to me. I had had it with other professionals and even some clients. We worry when an opportunity is presented and we say no.  "Will I offend someone if I don't? Will I miss out in an opportunity?" 

Even in my small market of Lancaster, PA, the opportunities to network are endless. How can you wade through the list and make good and informed choices? Here are some thoughts

• Pick groups that will be good referral sources, not just good customers. If you join a networking group of 30 people, who will be good customers but not good referral sources, eventually your membership will be a waste of time. A great example is Annie's business. Doctors, physical therapist and chiropractors are great referrals sources for her; as many of their clients can use her services. She can join a group of 30 people who are accountants, bankers, lawyers and contractors, who may eventually use her services; or she can join a group that is full of doctors, physical therapist and chiropractors who have a portfolio of clients that they can refer. Group two would obviously make more sense!

• Interview your group - you wouldn't hire an employee or even a sub-contractor without first interviewing them. Good networking groups, in some ways, become an extension of your sales force. So, interview them! Ask questions of the current members, and if you can, past members.  Do the members get referrals from the group? Do they represent each other's businesses in the community with the respect and professionalism you demand? If you know a previous member, why did they leave? Is the group managed by a larger entity? What are the rules/code of conduct? All of these questions will give you insight into the group and how they run. With this information you can decided if this is a group you wish to join.

• Consider your ROI - some networking groups can be pricey, not only in a monetary sense, but in time. When joining the Chamber of Commerce, I did some simple math to determine how much new business I needed to gain to offset the cost of membership. Then, I evaluated whether or not I could gain that business. Don't forget about the value of your time. If you spend 2 hours a week working with a Networking group; what value of time does this have? For firms who have hourly rates, this is easy to calculate. For others, you will need to become more creative. Either way, does the output outweigh the input? If not, you may not be with the right group. 

• Take a look at groups that provide different events and ways to meet people. A

great example is your local Chamber of Commerce. Chambers will typically have chamber wide events, which will give you access to a wide variety of businesses, while also offering smaller, more focused events. Chamber membership representatives should be able to help you find the right opportunities to capitalize. 

• Don't under estimate the value of peer-to-peer networking. In my previous career, we would lament about attending events that were full of "bankers. However, hanging with your peers, and even competitors, can be invaluable. From sharing ideas, talking through industry specific challenges, to understanding the differences between your business and theirs; you can not only find a friend to brainstorm with, but a potential referral source. At times, you or your competitor may not be right for a customer. Being able to refer to a competitor you know and trust helps your professional credibility. While spending all your time with your peers will not grow your business, there are times that it can be helpful.

• Look beyond the group itself to the people within the group. Are they people with whom you wish to do business? Do they meet the demographic that you want and/or need? If your product is woman specific, spending a lot of time with a predominately male group does not make sense! Additionally, if the people within the group are not ones that you wish to spend time with, it may be time to move on. There is nothing wrong with going to someone and saying, "this is just not the right fit for me."

• Finally, your participation in networking should be proportional to your ability to take on new work. I have met professionals who network to network; to the point that they are unable to complete the work that they get hired to do. This is where my sister and my conversation was centered. Her calendar was full - she had a waiting list of clients. Did it make sense to go out, and network to get more clients? Probably not. If you find yourself in this situation - Congratulations! This; however, does not mean that you can take yourself completely out of the networking pool. As many business owners know, things can change in an instant. A once full calendar can empty out quickly. If you have not been networking and keeping your connections current, you may find yourself starting over at square one. Conversely, if growth is your key, it is time to join up, get referrals and get growing! Don't be shy about saying you are in an expansion mode! Get yourself in with the right people and you should see success.

As my sister and I chatted, we agreed that networking was not evil. Rather it is a necessary part of growing a business. And, like most business growth, required a strategic approach, with clear goals along the way.