December 5, 2022

small business advice

Networking in a Recession

Jerry Osteryoung | 4/13/2009
Now that the economy is down and most firms’ sales are suffering, increased networking may be the answer.

A builder came to us with business down by over 60 percent and barely enough money coming in to keep going. When the economy was doing great and building was in demand, he had to turn work away and could charge very high prices. However, the world has changed for this builder and for so many others. In contrast, another builder that we are assisting is doing so well that people have to wait three months, even in today’s economy, for him to start on new work.

What is the difference between these two builders? Networking! The successful builder belongs to various networking and lead generation groups, and the other does not. The successful builder gets 40 percent of his business through networking, and the builder in trouble has done zero networking.

While advertising is effective, networking and referrals are so much better. If a friend says to me that they just tried a product and loved it, I am going to try it.

Networking brings “top of the mind awareness” for a product or service. I meet for breakfast every week with my Rotary Club (Sunrise in Tallahassee), and over my 10-year membership, I have gotten to know all of the members very well. When I need a computer repaired, who do I call but the folks that do this in my Rotary Club that I know personally.

Networking is not just meeting folks, as I have seen some entrepreneurs who pride themselves on how many business cards they have picked up at a function. Rather, networking is getting to know and trust people. Trust takes a long time to develop, but once it is there, it is as solid as granite.

Networking should be thought of as a way of developing trusting relationships. When you go to a function, rather than meeting as many people as you can, try to get to know three or four people in depth that you would like to have a continual relationship with.

Most chambers have “leads” groups for the purpose of bringing members together to do business with one another. There are also national and international organizations that specialize in networking for businesses that are easy to find on the web.

Networking can also be achieved in your local community by joining Rotary Clubs or other civic and charitable groups. However, it is not just joining the group that increases the power of networking; rather, getting involved is the real heart of the networking process. For example, in the 10 years that I have been in Rotary, I have also been the program director, treasurer, president and many other functions within my club. The point is, effective networking in a community organization involves both joining and more importantly, giving something of yourself. This is what allows trust to be shown and developed.

Now go out and make sure that you are spending at least 5 percent of your time networking.

You can do this!

Jerry Osteryoung is the Director of Outreach of the Jim Moran Institute for Global Entrepreneurship in the College of Business at Florida State University, the Jim Moran Professor of Entrepreneurship; and Professor of Finance. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. He can be reached by e-mail at jerry.osteryoung@gmail.com or by phone at 850-644-3372.

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