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While funding remains a major barrier to venturing into business, an increasing number of entrepreneurs complain about lack of access to markets as another big hindrance, which limits their prospects to grow their businesses even when funding is available. This was confirmed in a recent survey of female entrepreneurs by Standard Bank, where respondents cited scarcity of funding as the second biggest challenge after lack of access to new markets. Jayshree Naidoo, Head of the Standard Bank Incubator, says difficulties with accessing markets may be a symptom of an absent or ineffective networking strategy.
“A lot of small businesses don’t have big budgets – if any – to rollout marketing and advertising campaigns, and often have to use innovative ways to sell their products. What many seem to overlook is the power of networking, a cost-effective tool to market and grow your business,” says Naidoo.
“Attending networking events creates many possibilities. Whether you’re looking for people who could help grow your firm or advice from experts in the industry or a business partner, nothing beats networking. It’s a cost-effective chance to meet potential new buyers, suppliers or even a mentor,” she says.
Writing in his book What To Do When You Want To Give Up: Help For Entrepreneurs In Tough Times, entrepreneur Allon Raiz equally extols the virtues of networking. And while the common form of networking involves attending events related to your industry with the view of meeting potential new clients, he says networking can be both formal and casual.
“As an entrepreneur, once you know that your primary responsibility is to sell, sell and sell, there are definite ways to ensure that you expose yourself to the right people and that you find opportunities to pitch your business, either using your elevator pitch or your story,” Raiz writes. “An obvious exposure is at networking events – both business and social. And you need to attend as many as of these as possible. I firmly believe that early-stage entrepreneurs who do not network will not succeed. That has been my experience.”
As part of its business development programme, the Standard Bank Incubator hosts a number of networking events to create opportunities for small business owners to meet. Mentors and successful entrepreneurs are invited to share their experiences and how they overcame challenges in their early days.
Naidoo, however, cautions that attending a networking session is not going yield instant results. Rather, it must be seen as a relationship-building exercise, which requires a second date and follow-up meetings.
Equally important, entrepreneurs must remember that networking is a two-way street. That means whenever you meet someone, you need to ask them as many questions as possible regarding their business, as well as informing them about yours.
It is also important to filter through your contact list to see who is worth pursuing a relationship with, as it is not possible nor desirable to make friends with everyone in your industry. Here are some tips on effective networking:
Be an early bird: Intuitively, most guest prefer to arrive just when the official programme is about to start to avoid being lonely. On the contrary, being an early bird creates endless networking opportunities. Firstly, you get a chance to meet the host, and introduce yourself and your business before a circle forms around him or her. Secondly, being one of the first to arrive makes it easy to approach other “lonely” guests and begin a conversation before everyone settles into a group.
Remember, it’s a two-way street: It may be tempting to dominate the whole conversation with your great plans to build a business empire or about how you’re struggling to penetrate the market, but keep in mind that your acquaintance is equally eager to tell you about his or her business. Show interest in their story by asking questions and listening. If there’s a meeting of minds between the two of you, a lasting relationship will begin.
Don’t oversell yourself: Just like in a formal pitch, don’t exaggerate your abilities and capabilities. This may be tempting when you’re struggling to get your business off the ground and see a potential customer, but it’s not worth the risk. The last thing you need is to receive an order you can’t deliver, or ruin a relationship that could potentially grow big.
Bring lots of business cards: Carrying business cards to external meetings has become standard practice for professionals and business people. Writing contact details on a diary or storing them on your phone is an unnecessary distraction during a conversation, and there’s a chance you may not remember who’s who from your contact list a few days later. Because business cards contain the key particulars of a person, they tend to serve as a good reminder of who you met.
Follow up, follow up: Just like any courtship, a second date is essential. If you see a potential relationship with an acquaintance, inquire about the best way to stay in touch. Busy people prefer to be contacted via email, while those who are still hustling may not mind a call on their cellphones. It is important to make contact within a week after the event, while your contact still remembers you.