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Advantages and Disadvantages of Business Networking

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Business to business (b2b) networking is related to building business relationships and personal connections between business owners to generate a regular supply of new customers. By networking you are developing a social network that you can leverage to gain business insights, increase your customer base, generate new business ideas, and more. It can be an effective marketing tool, but it has its advantages and disadvantages.

Advantages of Business Networking

Business networking has its advantages and can be a valuable and effective tool to expand your business through access to more knowledge, ideas, experiences, reviews,  potential clients, and opportunities.

Access to More Knowledge

Each business owner has specific information required to operate his / her business. An auto mechanic must know how to fix cars. An insurance agent must know about insurance. Also, each person has different insights and perspectives. Meeting with a wide variety of individuals with expertise in specific areas helps give you more knowledge. Ask them questions. Find the best practices for each field. Learn from those who are doing.

Access to More Ideas

If one business owner has five good business ideas, how many different business ideas would twenty have. A business idea could be best practices for human resources or marketing. It could be ideas for new startup businesses. Business networking offers you the opportunity to bounce ideas off other people. Most ideas may not ever gain any momentum, but once in a while a great idea comes along that has potential.

Access to More Experiences

Each business associate has his / her own set of experiences. Some of these experiences can be generated through normal business operations, while others can be developed through hobbies. Operating a successful business is much more than having a great idea. It requires work and effort. By leveraging the experiences of those who have gone before, you can overcome many of the roadblocks that faced them. They can give you insight to better operations guidelines, effective marketing strategies, and better technology.

Access to More Reviews

It is much easier to gather business reviews from those who you talk to on a regular basis than from those you see once and never communicate with again. A side benefit of business networking is that you can develop strong relationships built upon trust. A person who trusts you is more likely to provide you with a positive review or testimonial. You can leverage these reviews to increase your trust with others who may not know you as well.

Access to More Potential Clients

Each business owner has his or her own set of clients. On occasion they ask the business owner if he or she knows somebody who… A single person cannot provide everything to everybody. A major advantage of having an established network of trusted business owners is that you feel comfortable recommending someone who can provide that product or service. A single business owner has dozens, hundreds, or even thousands of potential clients to recommend.

Access to More Opportunities

An entrepreneur is a problem solver. He or she may have developed a solution that others are looking for, and more importantly, are willing to pay for. Sometimes entrepreneurs have solutions to problems that they have no time to pursue, or the opportunity may be way outside their field of interest or expertise. By communicating with a number of business owners from various fields, you can get a wide variety of ideas for new businesses. Also, business networking opens up ways for you to further establish the business you already have. Through business networking, you can find larger and more established clients. You can gain access to people and resources that you could not do on your own.

Disadvantages of Business Networking

Business networking has its disadvantages. There are situations and occasions in which b2b networking can actually decrease the value of a business.

Too Many Business Connections

As you network, you meet with more people. Many of them offer similar products and services to others in your network. Real estate agents, insurance agents, medical professionals, financial planners, etc. Many provide similar services to each other. You cannot provide leads to ten different real estate agents. How do you decide which one to give the lead to? If you provide it to one, the others may get upset. As your business network grows, you will be faced with this dilemma.

Too Many Resources

Business networking requires time and money. You need to meet with people in order to generate business. Sometimes these meetings cost money. They definitely cost time. The more you network, the more time and money you spend. There comes a point where too much networking drives down the value of your business because you are not spending the time, money, and energy required to maintain it.

Not For All Businesses

Some businesses are difficult to find leads for. It is easy to find leads to computer tech, social media marketers, and beauty supply consultants. It is much more difficult to find leads for a person who operates a book store or raises racing horses. Businesses with a narrow audience and a narrow sliver of potential clients have to be creative with business networking to make the right connections.

Limited Expectations

When you start business networking, you may have the expectation that you will be able to get a large number of clients, and that it will happen right away. Business networking takes time. You may have to invest quite a bit of it before you receive a single lead. Also, depending on a number of factors, you may receive a large number of leads, or you may receive very few. If your expectations are not in line with reality, you will be disappointed in the results you get from business networking.

Reduced Privacy

As a small business owner, you are the head and face of the business. You are in the public eye. This alone reduces your privacy. For some, they want to be behind the scenes. They do not like to be in front of people. There are some businesses where you do not need to be in front of the public much. Most however, do. If you are a private person, and you want to remain that way, operating a business can be a challenge.

More Open to Fraud and Negativity

As you become more visible in the public, you open yourself up to fraud and negativity. There are people who like to take advantage. They are in every profession. They will be happy to take your money and give you nothing in return. People like this tend to bounce around as they burn bridges. Be careful to spot them early and not get caught up with people who over promise and under deliver. Also, stay away from people who are miserable. Being a business owner is not easy. Surround yourself with positive people, rather than negative ones. It will make the whole situation more pleasant. 1040TaxBiz marketing classes provide strategies for networking. Maximize your tax law and marketing training by partnering today!

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