BUSINESS NETWORKING

The underestimated canon in the business world

Advertisement is a very essential tool in business. Large corporations invest hundreds of millions of dollars in advertising their goods and services annually. According to Forbes.com, in 2011, Apple’s advertisement budget was an approximated one billion dollars. They are not alone. Microsoft spent over 1.6 billion dollars in advertisement of its products and services in 2012.  An article on www.Investopidia.com listed 7 companies with big advertisement budget and you will be shocked to know that neither Apple nor Microsoft was listed. These companies are:

·         Procter & Gamble (P&G): a leading consumer product company that provides consumer products in segments like beauty and grooming, health and wellbeing, household care, snacks  and many more products. Estimated spend on advertisement was $2.95 billion in 2011

·         L'Oréal: specializes in beauty products from makeup and skin care to tanning, and a wide range of hair products including styling & coloring for men and women. Estimated spend on advertisement for 2011 was $1.3 billion

·         General Motors:  one of the largest automobile manufacturers  spent an estimated $1.78 billion on advertisement. Highest spend on advert in the automobile industry for the year 2011

·         Chrysler:  also an American automobile manufacturer. Spent an estimated $1.19 billion on advertisement in 2011

·         Verizon: an innovative wireless communications company that provides superior broadband, video and other wireless and wireline services to customers, businesses, governments and wholesale customers across the globe. Verizon operates America’s largest 4G wireless network. Estimated spend on advertisement was $1.64 billion in 2011

·         Time Warner: global leader in media and entertainment with businesses in television network, film & TV entertainment and publishing, uses its industry-leading operating scale and brands to create package and deliver high quality content worldwide through multiple distribution outlets. Estimated spend on advertisement was $1.28 billion

·         Pfizer:  world’s largest pharmaceutical company by revenue. Develops and produces medicine, vaccines for a wide range of medical conditions. Estimated spend on advertisement in the year 2011 was $1.2 billion.

Investment of these companies on advertisement alone is enough to start up over a million SME in many countries. This goes to show that advertisement is a key to the sustenance of corporations and businesses.

Some years back, in an episode of “The Apprentice” (UK version) which has Lord Alan Sugar as the potential investor in the works and ideas of contestants –majorly the winner of the show, Lord Sugar made it clear to one of the contestants who was proposing advertising his products via the mass media that the budget of most of his potential competitors on advertisement alone surpasses by a mile the amount of two hundred and fifty thousand pounds(250,000) he was going to invest on the business of the contestant. What does this imply for owners of small and medium sized enterprises (SMEs)? If as a small scale enterprise, you are trying to compete with the Big guns in the industry, you have a practically little chance of acquiring even 0.5 percent of the market share from larger corporations in respective industry or sector regardless of the quality of your products because your competitors have resources to cover more grounds in far less time as your own organization.

As an entrepreneur in Nigeria, it worse. Government policies hardly support upcoming businesses, financial institution are less likely to fund any business (regardless of its potential) that does not have a form of financial security. Mind you, the price of advertisement is relatively as high in Nigeria as it is in many other countries in the world. So, how do we solve this problem? Are potential entrepreneurs to ignore their visions, missions and ideas? Do they like many others seek to earn “white-collar” jobs and resort to a routine job of 9 a.m. to 5 p.m.? Alternatively, do they just get a trade that enables them to feed from “hand to mouth” without much prospect of growth?

How have existing businesses in the world overcome this problems and grown from small-scale enterprises (SMEs) into major players in their respective fields? Brian Chesky (internet developer and founder of AirBNB) said “build something hundred people love not something a million people kind of like”. Which means even if the market base is initially as small as 100 customers who really love the product offered, it is easy for the market base to grow beyond 100 million customer with time with the power of business networking. Aside the famous story of Mark Zuckerberg- the founder of Facebook, below is a list of some entrepreneurs that started small and with the aid of  business networking, their businesses grew:

·         Tracy DiNunzio: founder of online marketing outfit Tradesy

      

·         Bill Gates: founder of IT giant Microsoft

      

·         Luck Lang and Darren Westlake: founders of Crowdcube

·         Steve Jobs: founder of  computer giant Apple makers of the Macbook and Iphone 

     

Business Networking: One of the most under-utilized and undoubtedly one of the most effective (in terms of cost and time) business tools in the world. Many businesses grow via referrals, online, business to business (B2B) and face-to-face type business networking. This form of investment makes SMEs able to get there goods and services out to a large group of customer base at a lesser cost, thereby enabling and encouraging growth of these business and sustainability in the long run. Business networking also allows for:

·         Customer engagement: - this form of product marketing is closer to the grassroots (the end users), thus making it is easier to get honest customer opinion of particular good or service provided. This helps in making adjustment where need be. It also aids in enhancing the strengths of the company and maximizing customer satisfaction. Early customers also enhance growth of business.

·         Credibility enhancement: - business rely on the credibility of their brand in the know that one “good word” may spur potential customer to patronize the product and a good business person would eliminate any factor of jeopardy to his/her business.

·         Strategic investors and financing partners: - Big corporations and business minded wealthy individuals are always on the lookout to invest in sustainable SMEs. With business networking, it takes a shorter period for big corporations to get at least an insight into the business and possibly seek to engage such business in one way or another.

·         Mentorship and advice: - Offers of advice on market insight and industry structures from professionals in relative sectors are quite common benefits SMEs that engage in Business Networking get.

·         Go-to-market partners: - Business networking encourages the chances of SMEs getting distributors, retailers/resellers, logistics and easier access to outlets. This in turn builds a wider chain of businesses and creates a larger web of entrepreneurial network.

·         Operating capability enhancement: -

It is very important for an entrepreneur to maximize the use of his/her business network:  A readily available weapon that might be the key to the growth of your business. No lead is too small, exploit all at your disposal. Attend business event, trade exhibitions, conferences and other socio-economic events, which many have in attendance like minds (entrepreneurs), professionals and aspiring entrepreneurs who may have similar vision, challenges and experiences in relevant sectors. 



 

Ten Tips for Successful Networking:

1. Identify specific target markets

Focus in on the influential people you should meet and begin the process of building and nurturing relationships. Identify segments of your market to focus and get the most rewards. You may decide to break your targets down by level, specialty, geography, industry and/or a variety of other factors. The important thing is to have a plan – begin to narrow down to 2-3 specific targets to get started.


2. Know your marketplace
Be well read. Stay on top of currents practices, trends, new businesses and resources. Belong to and attend professional association meetings, seminars, conferences, and networking events where you can be educated on the most recent developments and challenges. Read the appropriate trade journals, periodicals, newspapers, and websites that make you aware of up-to-the-minute changes in your field, as well as your competition and lowers the risk of encountering surprises.

3. Be visible and “in play”
Put yourself in a position to meet people. Network internally within your organization, and externally within your industry. Attend business meetings, professional associations, trade shows, college alumni gatherings, etc. Take an active role within your professional and personal community. Many people make the mistake of putting their heads down, doing their job and say, “I don’t have time to network.” The truth is you have to discipline yourself to meet with the right people in order to be more effective in your job and the only way to do that is to put yourself in a position to meet people.

4. Become the source of relevant information
Build a reputation of expertise and sought-after resource. Keep your skills and competencies current. Take courses, attend seminars and workshops. As you develop a following as a content expert, people will be contacting you, hoping to build a relationship with you, and thus putting you in a position to be viewed as a trusted authority. Building a name for yourself is a prestigious role to earn. Having this kind of wisdom and experience speaks volume for any professional.

5. Always give something back to your profession and community
Not only does it make you feel good as a decent human being but it also brings you indirect rewards and benefits that you never expect. People remember acts of kindness and good will. They are then inclined to return the favor as well as serve as a source of referrals and praise for you. Do not expect anything in return, however. There are many ways to give back to your profession and community – you pick the ways that bring you most joy.

6. Practice networking etiquette
Remember, it’s a two-way street. It’s a constant give and take. Whenever you are networking, it should always be a partnership that is viewed as mutually beneficial. Both sides should regard the relationship as a rewarding one. One person should not always be the recipient. On the flip side, do not forget the people that helped you when you needed their assistance. Even if they don’t reach out to you for any kind of help, initiate ways you can be of help to them as a way of thanking them.

7. Maintain your shelf life
Create a track record full of accomplishments and market them appropriately. As you build your portfolio, it is easier to reflect on your history of success. People look for specific accomplishments and contributions as a way to differentiate themselves in the marketplace. Build substance not fluff.

8. Create a networking database
Make it formal and be disciplined about expanding and maintaining it. There are so many options now with social media and software packages to assist you. In this world of sophisticated technologies, it is vital to have your own detailed database that includes all of your contacts. The accuracy of your database will be a key reflection of your success as a “seasoned networker.” Update it regularly and create logs of all conversations with repetitive flags for follow up. Make it a priority!

9. Have a clear, brief message to deliver
Be sure to have a crisp message that will gain people’s attention and interest. Keep in mind that professionals in every line of work are getting inundated with emails and phone calls every day from people trying to sell them one service or another. Why should they listen to you, much less be motivated to engage in a conversation or meeting? Make your message clear and brief, outlining a mutual bond that will grab their attention. Be friendly, outgoing and positive. An upbeat and enthusiastic style is always enticing and contagious. You can refine your message and develop slightly different messages for different audiences. Always be prepared and do your homework prior to engaging in a conversation. Most importantly, be genuine - show your conviction and passion.

10. Don’t ever stop!
Gain and sustain momentum. Most people make the mistake of running hot and cold with their networking efforts. They only work at it in when they can, when they need something, or when things are slow. The best results are achieved when you make it a priority, are disciplined, and have a plan. Set realistic goals for yourself and make yourself accountable to execute them. Use a formal system for follow-up to keep you on track with specific timelines. Once you have a formal system set up for yourself, it is like second nature and is worked into the day-to-day pieces of your job and life. You see the results and reap the rewards.

References

Rita B. Allen. (2013)10 tips for successful networking. Available at http://www.boston.com/business/blogs/global-business-hub/2013/02/10_tips_for_suc.html

(Accessed September 26, 2013)

Ryan. (2009)10 Fortune 500 Companies That Started With Next to Nothing. Available at http://www.businesspundit.com/fortune-500-rags-to-riches/  

(Accessed September 27, 2013)

Janet Fowler. (2012) 7 Companies With Big Advertising Budgets. Available at http://www.investopedia.com/financial-edge/0612/7-companies-with-big-advertising-budgets.aspx   

(Accessed September 29, 2013)

Ivan Misner. (2013) Meta Networking and How This Entrepreneur Built a Business Empire on the Need for Sales Leads. Available at http://www.entrepreneur.com/article/227858#ixzz2gIRNCW2k

(Accessed September 29, 2013)