The right organization can bring together business people with like interests who may be able to benefit each other. Networking can open doors to venture capital, offer introductions to key advisors and consultants, and serve as a marketing channel for new products, services and companies.
"Networking is critical to success," says Bruce Sanguinetti, executive in residence at Sierra Capital Resources Inc. and a veteran of many start-up projects. He notes that entrepreneurs, especially those in the medical-device and high-tech industries, often ask investors to make multimillion-dollar decisions on products that may not yet be in prototype form. "We need to develop those relationships, develop that trust, develop that comfort level," he says. "Networking helps us do that."
It takes time and energy both of which can be in short supply for entrepreneurs trying to launch a business. But according to Paul Sutton, it's worth it. He's the founder and president of Corporate
Planning and Finance. "Entrepreneurs are often so busy trying to build their companies that they find it hard to get out and go to events," he says. "But these events can be so valuable in terms of identifying resources and building relationships. It's almost a necessary part of your business plan."
Tom Young, founder of Sparks-based Great Basin Brewery, suggests that entrepreneurs think of networking as an investment in their business. And as such, they should carefully consider where to put their resources.
"Preparation, or doing your homework, should create a targeting mechanism for where you spend your time and money," Young says.
"Before any event, ask yourself, 'What is the point in spending my time and/or money in this networking activity?' Networking is all about research and preparation; the act of being there really comes second."
First, find an organization that fits your focus. Nevada Business Connections (NBC), a newly formed membership organization that serves northern Nevada companies with a series of programs, information services, provides resources, and specializes in business development.
"NBC is in the 'inner circle'" says Brian Colodny, managing partner, Kohn-Colodny, CPAs. "We are not the experts, but we know who they are." An NBC advisor, Colodny explains that "If you give us three hours, we will save you a month of time and energy to answer your questions. And it's free and confidential."
It also helps to know a little about the membership of a networking
organization. Find out who shows up at the programs ask the organizers or talk to someone who's attended past events then compare that group to who you want to meet. "Are they the people you're trying to learn from?" Young asks. "Every entrepreneur should be asking,
'What is the track record of the people who are involved here?' Do you
have the time for that stuff? It's much more about time than money for entrepreneurs."
Sanguinetti knew that he wanted his networking to lead him to people who knew about the local business environment and what was currently happening, so he chose to join NBC. "I attended almost everything religiously when we were first starting up," Sanguinetti says. "I found a lot of camaraderie - a lot of grassroots support there." He also found enormous support from industry insiders who were willing to spend time with him.
"The culture in northern Nevada is unique," Sutton adds. "People want to help each other. That's different - you don't find that in many other places in the country."
Business people get a variety of benefits from networking. Sutton has seen companies work together on similar projects, saving both time and money. Sanguinetti knows of entrepreneurs who have received substantial funding in part because of their networking efforts. But even those who don't come away with capital or business partners usually find something that helps move their business forward.
"Sometimes you can fall into the trap of just looking to build your business and get more sales," Sutton says. "But you should also be thinking about how someone you meet might be able to help you improve your marketing methods, improve your products, or build your website.
It's not just about selling, but about learning better means to increase your sales."
Young says, "You have to be able to supplement your own skills. You need to do a candid inventory about what you're good at and what you're not good at. Then, in tandem with your business plan, you need to seek out and convince people to come help you out."
While you may network to seek specific advice, it's important to remember that everyone you meet can help you get the word out about your business or product. "Your network becomes your marketing department," Colodny says. "They can help you spread the word."
Kris E. Holt is executive director of Nevada Business Connections in Carson City. Contact him at 882-8306 or kris@nevadabusinessconnections.com.
