Benefits Of Business Networking

 Networking in business can mean two things.

One is, of course, the quantitative technical aspect of installing an efficient system of Local Area Network (LAN) in your office or a Wide Area Network (WAN) among your various branch offices. A systematic and technologically sound network has a very big role to play in creating streamlined processes, better management of data and user-friendly accessibility for employees in your business.

But in this article, we are going to talk about the top 5 advantages of the equally important qualitative aspect of networking in business - which includes networking with other business owners, customers, dealers and peers.

Especially for small and growing businesses, which do not have a marketing department or lots of money to spend on advertising, networking can be a key for expanding the business. For the CEO of a small business, investing in networking often serves as the biggest gateway to getting leads, referrals, new business and contacts. Let's take a look at the top 5 advantages of networking in business:

1. You get a feel for the local business environment

Especially in the context of your own small business, it is vitally important to understand how the local market behaves, what are its key demand areas and its most effective price points keeping in mind the demographic and psycho-graphic profile of the area. Networking with other peers in your local business area and associations of local business owners and customers helps you get a clearer picture of the demand and supply graph of your local business area.

2. Keep updated with the current happenings in the local business environment

No business can grow in isolation. Networking with other business owners and associations helps you keep updated on the latest local business news, new regulations, incentives or tax reliefs offered by the local government to small businesses and the changing customer demands.

Besides, it is important to have updated knowledge of current business trends to be able to spot emerging business opportunities. You can accordingly fine tune your business plans and marketing strategies to make best use of the developments.

3. Gain qualified leads and referrals

It is said that, on average, 70% of all new business is gained through word of mouth and positive recommendation. Irrespective of how much money you invest in advertising or marketing, the best way to increase your business is by getting solid referrals or sales leads that come from known contacts.

Once you build a network of good, reliable contacts, you will find your contacts passing on business leads to you, which you will be able to close more quickly than those coming from advertising. People like to refer those whom they know, like and trust.

4. Get useful business tips and advice

A good network of contacts is like an investment in executive coaching. You will find that the best business advice and tips come to you from your contacts. People with whom you have built positive relationships would gladly pass on effective and honest advice to you.

Especially your peers or business owners who are in non-competing businesses are great sources of useful tips. One proven way of building a great network of contacts is to join a CEO club or CEO association where you can interact with experienced peers and business owners on the problems you are facing or the strategies you would like to apply.

Networking with peers in a CEO group or CEO club who will give you sound and honest advice is one of the best ways of receiving helpful business insights. Your contacts and peers may have experienced similar problems to yourself and can point you in the right direction.

Also, make it a regular exercise to attend relevant business seminars and conferences where you can establish a number of potential new contacts.

5. Unlock new business opportunities

Building a growing network of business associates, business contacts and peers is like opening yourself to a larger world of new ideas. You may be running a small business but that does not mean you should limit your ideas, vision and plans for your business within narrow confines.

As you meet with new business contacts, you will be amazed to find yourself being exposed to new business ideas, new market possibilities and new potential for expansion which you otherwise may not have thought of.

Business networking helps you in many other ways. It develops your communication skills and confidence in meeting with new people. Besides it also gives you unique opportunities of being of help to others, just as others have been to you. It may hold the key to your business's expansion and success.

Open Or Closed Book? When It's Good Sense to Tell the World You're Selling Your Business

If you are considering selling your small to medium sized business, you no doubt want to ensure you get your business marketed to the right people and as clearly as possible. Many businesses rely on total discretion and confidentiality when they go up for sale, in fear of losing a client base, a reputation or even stock market value. However, there are many instances where it would help your cause a great deal if it was well known that your business is up for sale. Let's look at some good examples of when it is most likely safe to make a big noise about your sale and ensure your business gets noticed on the marketplace.

The obvious industry is the food sector. If you run a search on the major business for sale portals, you'll instantly see that there is a whole minefield of cafés, diners, restaurants and take away outlets up for sale. These kinds of businesses change hands quite often and are a good business to sell because in most cases, they already have a footing in the local area, are known by the local residents and should already have a loyal customer base.

More importantly though is the fact that anyone becoming aware of this kind of business being sold will make very little negative impact. In fact, when a restaurant or café changes hands, it can have the opposite effect and create a new positive, fresh outlook for customers new and old. With so many on the marketplace, there is a lot to choose from so any potential suitor effectively has the upper hand because they have so many options available to them. This is why in a situation such as this, you need to make as much noise as you can. For every café up for sale in any town or city, you can count several others will be too. Businesses such as these change hands often because they require a very intense level of dedication from the owners. Some go into running a business such as this with a great deal of optimism and enthusiasm, only to find that its really hard work and too much to take on. Within a year or two, they've had enough and are ready to move on. Sound familiar?

If this is you, then you are not alone. Any business in the food industry is tough graft and like every other business in this sector that is up for sale, you need to ensure your marketing doesn't reflect this and that your business for sale appeals to these fresh, enthusiastic and energetic individuals. So if you have an advert online or are about to embark on advertising your business, try to spend some time getting your advert up to scratch.

Take some good quality photos of the premises. But make sure you clean the place first and make it look great. Remember, you're selling a dream! Also, take the time to get your figures in order, especially profit margins, turnover and any other information that will help really sell the dream to the next owner. If you want to sell your business in an already saturated industry sector, you need to make some serious effort. One big push will help you sell it faster. So don't put an advert online with only a few poultry lines of text. Really give the full details and take as many pictures as you can to give any interested parties a real feel for the place.

And finally, don't get greedy. Have your business valued correctly and put it on the market for what it's worth. If you need some advice on this area, read another of my articles that covers business valuations and how to price it correctly.

Selling a business is a tough task and it is time consuming. But if you want to get it sold, you need to put in the time and effort. If you are based in an area surrounded by other businesses, it might not be such a bad idea to tell your neighbours of your intensions. They may know someone who is looking to open a business such as yours. Your direct neighbours may even want to buy you out of your business so that they expand their business across your premises. The more people who know, the more opportunities that could arise. If you are certain that disclosing your intensions will have little impact on your business then tell the right people. Get on the search engines and start submitting adverts to the business for sale directories.

There are numerous examples of businesses that I have seen up for sale and quite clearly are happy to disclose the business name, location and price. Why? Because it sometimes pays to get it out there so that word can spread fast that an opportunity for someone else could be waiting around the corner. Example businesses include petrol stations, convenience stores, pubs and clubs, small boutique stores, shoe stores, take away and sandwich bars. Even tourism related businesses.

The One Question That Many Small Business Owners Fail to Honestly Ask

Small business owners and entrepreneurs are hard working with 70 to 80 hour workweeks. Yet sometimes these industrious, enterprising, individuals believe their sweat equity is equal if not exceeds actual dollars and cents. The reason for this gap between what is believed to be true and what is actually true is because there has not been a succession plan based upon an objective business valuation.

Recently I interviewed Mark Machnic who is not only a CPA, but holds additional credentials including CVA, CFFA, CFDP and CDFA and is the principal for Business & Matrimonial Valuation Services, LLC of Schererville, IN. Mark's expertise allowed me to ask him a series of questions specific to these two often ignored aspects of small business management:

Business valuation

Succession planning

Why is it so important to understand business valuation?

"Most people do not understand the true value of the business. From my experience, people think the business is worth the net income any given year. They fail to take into consideration the goodwill aspect of the business, past earnings, and projected future earnings. Also, the process of valuing a business involves comparing the subject company to its industry peers by utilizing various databases."

What part does business valuation play within succession planning?

"The business valuation can be used as a benchmark for succession planning. The projections made within the valuation can be used as a trigger mechanism for recruiting the most qualified employees and for helping train current employees for advancement into more responsible positions. The valuation can be used to set goals based on projections of future earnings."

What is the most consistent misunderstanding that business owners have respective to the value of their business?

"Most business owners do not take goodwill into account when valuing their businesses. They tend to focus on the tangible hard assets instead of some of the intangibles such as goodwill. They also focus on the current income of the company, not taking into consideration past earnings or the future outlook of the company."

Besides not knowing what their business is worth, what is the second most common mistake you observe with business owners and executives?

"From a valuation standpoint, business owners do not understand how to add value to their business. The goal of a business owner should be to build a successful business that will attract numerous potential buyers. They need to know how to increase the value of their businesses and also to "keep the house" in order at all times. A business owner never knows when someone will come in and make an offer."

Finally, what are some issues within the current economic environment that will require business valuations?

"Business owners or those in management roles may be looking to merge or sell during tough economic times. If the economy is causing a negative effect on a business, the owners look at their options. During tough economic times, the number of qualified buyers tends to decrease, making it more difficult to sell a business."

When you, as the small business owner, know the actual worth of your company, hire the best of the best (because your company can demonstrate that worth) and continually add value to your business, then you can be the Red Jacket in the sea of gray suits. Not knowing may place you with all those other failed businesses and you become one of the many and not one of the few to succeed.