Networking – the Way of the Future
Running a small business these days is no mean feat. Far from it. In fact small business owners today need very diverse skills and considerable expertise – not to mention many more hours in a day – just to survive. It’s little wonder we keep seeing so many businesses collapse.
You have to find a smarter way to do business.
Give some thought to networking. Networking happens when a group of enterprises get together to pool their talents and resources to obtain results that otherwise would be impossible.
This is an ideal way to glean useful skills and expertise, as a group of people can bring a huge number of different skills to the table. But the real gains are to be made in forging links with other companies – your combined strength or clout may open up opportunities not available to single entities, for example in developing new markets both domestic and export.
Think about it this way. You might see a fantastic opportunity to market your products internationally, but because of your size you just don’t have the resources to develop it. With the support of a network you’re likely to have a much better chance.
Like many small to medium-sized enterprises, your business may have limited resources, limited skills, limited capital base and insufficient critical management skills to be truly international. But the strength you gain from a network, which brings together different skills, resources and more capital, could offer the support you need to clinch the deal.
Model of the future
Many commentators believe that formalising networks is your main chance of surviving long term in business and will be the business model of the future.
It’s not about giving away your trade secrets to your competitors, or stealing customers from each other. Networking is about collaborating for a shared result – to achieve business success and, potentially, increased profitability.
Some businesses form networks to increase their buying power or to get access to a broader range of financial and human resources with which to expand their businesses.
Others may have machinery which has excess capacity. Members of the network could make use of the plant and therefore reduce its idle time.
Another significant benefit to small businesses is that by putting together the individual items and services produced by each firm, you create a product that none of the members could have produced on their own.
There are many ways in which businesses of all sizes can benefit from being involved in a network. Of course, everyone in the network needs to be able to gain from the opportunity. One of the first things to do when you establish a network is to clearly define the common goals and objectives to be achieved so that being part of the network will be advantageous to everyone.Where franchising takes one idea and makes it work, networking takes small diverse units with different philosophies, products, and programmes and finds areas for collaboration.
Next Steps – When You Want to Form a Network
Forming a network often follows these phases:
Promotion – a promoter (this could be a businessperson or someone from a Government agency, an industry organisation, accountancy practice or a lead firm) raises the idea of a group of enterprises coming together to take advantage of a market opportunity. The first meeting looks at the advantages and disadvantages of forming a network.
Development – participants consider and decide on all the essential issues in establishing the network, such as common goals, objectives, market opportunities and so on. Guidance from someone experienced in networks can be helpful during this stage.
Management – when the network has started operating, a network manager is normally appointed by the participants.
A network needs to:
- Agree on common goals and objectives
- Make a formal business plan
- Gauge the market opportunities and how they can be grasped
- Get genuine commitment from members
- Appoint someone to champion the cause and coordinate the group
- Decide on the structure and ownership early on
- Establish rules on how decisions will be made, how new members will be approached and so on.
Why Network?
Networks are formed to:
- Share knowledge, information and ideas
- Improve performance and efficiency
- Share market intelligence
- Share costs of market investigation, production, research and development
- Share market entry costs which might otherwise be prohibitive to individual enterprises
- Improve opportunities to meet customer demand for product and services.
