by Aliana Keith
In 2011, a Business Insider article on the importance of networking concluded with the statement, “Your net worth is only as good as your network.” This seems, for all intents and purposes, today’s start-up speak for the age-old adage: “It’s who you know, not what you know.”
When it comes to launching and maintaining a business, there are many factors at play. External factors include everything from global and local economies to weather and political climate. On the other hand, its success also relies on internal factors like financial management, marketing capabilities, resource allocation, and quality of operations. However, research conducted by The Economist Intelligence Unit (EIU) revealed that 78 percent of start-up owners see networking as vital to their success. The study involved over a thousand entrepreneurs around the globe.
It emphasized that out of all the resources available for starting a business, it’s still advice from peers and mentors that’s seen as the most valuable to innovation and revenues. To understand further, here are some reasons why networking is one of the most vital strategies to help businesses grow.
You learn from the experience of people who’ve been there
Looking at things from an overall perspective, launching a start-up isn’t a well-trodden path. Fortune Magazine specified that the failure rate for startups is at around 60 percent. But those who belong to the remaining 40 percent have plenty to offer in terms of tried-and-tested advice. They cover everything from government permits and requirements to cheap rental space and great suppliers.
Even in the most business-friendly cities like New York and San Francisco, respondents from the EIU study still indicated that it was difficult to start their business. New entrepreneurs will find value in stories and takeaways from this sort of people. Equipped with their insights, you can be more certain of each business decision; the amount of work to be done would seem less insurmountable; and sales will flow in more naturally.
Opens doors for collaboration
The importance of connecting with peers, not just mentors, to build a group of trusted partners cannot be overstated. Even seasoned startup entrepreneurs also need to network when it comes to current issues or future business prospects.
In truth, many businessmen got to where they are because they were able to see opportunities where others saw only problems. This eye for innovation should not stop working once your startup is off the ground. Businessmen who network can gain benefits like joint ventures, speaking opportunities, supplier upgrades, new expansion vectors, and so much more.
Builds your reputation
Regularly attending networking events related to your field can go a long way in building your reputation. The combination of visibility and a bit of good mingling can help businessmen establish an image of reliability and authority in their area of expertise. At times, this is the case even if the people you’re talking to don’t seem like immediate business prospects.
Entrepreneur Magazine explains that meeting a person doesn’t entail just one plausible relationship. Getting acquainted with a peer or mentor opens doors to relationships with their contacts as well. This increases the chances of leads and referrals that could go your way in the future, since people will be more likely to remember you.
This effect trickles down to consumers. In this day and age, good reviews have a big potential to boost business sales. The people you meet in events may become your customers as well.
Provides golden opportunities
Last but not least, networking provides you with opportunities to help other entrepreneurs – or other people in general for that matter. Like in any aspect of life, the golden rule applies to businesses as well. Menlo Coaching pointed out that establishing relationships early on enables you to learn not only what other people can do for you, but also what you can do for them. This is even more crucial for startups, seeing as you’re going to need all the help you can get to grow your business. And one of the best ways to garner support is by giving it out to those who need it, too.
All in all, these are just a handful of the numerous benefits of networking. Regardless of your industry or location, it’s always good to get out there to make new connections and maintain existing ones.
