Why Networking Is a Must for Successful Entrepreneurs
BY ROMAN KUMAR VYAS • MAR 20, 2023
4 Reasons Why Networking Is a Must for All Successful Entrepreneurs
Networking is a critical tool for entrepreneurs looking to grow and succeed in their businesses. Here are some tips on using it effectively without spending too much time and effort.
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Despite its widespread recognition as a valuable tool for entrepreneurs, many individuals still struggle to use networking effectively. Starting and running a business can be both exhilarating and intimidating, and it’s easy for founders to get consumed by the day-to-day tasks of running their company. Personally, it wasn’t until I started dedicating time and effort to building my network that I realized the full potential of what my business could achieve.
After devoting time to connecting with other entrepreneurs, I established valuable relationships with potential investors who believed in my business and provided the necessary support and funding to take it to the next level. I’m sure building a network of connections is not just an optional activity for entrepreneurs but a vital tool that can lead to new opportunities, partnerships, and growth. Here are some tips on organizing your network effectively and with minimal time consumption.
So, what can one get from networking?
There is a specificity of networking among entrepreneurs – it appears to be much more effective. People in our community are often aware of the benefits that connection can bring and are more readily open to building mutually beneficial relationships, which is done by:
Establishing valuable connections with potential investors. I list this opportunity as the most important because finding investments is indeed one of the most challenging tasks for an entrepreneur. The personal connection allows you to build relationships with individuals who can provide support much more effectively than reaching out to them as a “cold” audience.
Expanding your knowledge and learning from other founders and professionals. Exchanging best practices with people who are not your direct competitors but are present in the same region as you are or have a similar type of business in another market provides you with precious insights. You can learn from their experiences, pick up new ideas, and stay up-to-date on industry trends.
Gaining access to partnerships and collaborations. In the case of B2B, people are four times more likely to purchase a solution from someone they know themselves or their friends recommended. So being open to new connections may significantly broaden your business opportunities.
Building your personal brand and increasing business exposure. Apart from helping you at the moment, establishing a connection with someone can be extremely beneficial for you later on. The chance of that is higher the more you show your expertise and interact. You never know what will happen with the person you once met at a conference — maybe they will launch a successful business or become famous someday.
Without establishing connections, each of these actions might take much longer and be more challenging. But when you get to know the person who can help you, you will reach your goals almost naturally.
2. How to make networking most effective
The main thing to understand about networking is that it’s a two-way street. To be truly effective, it must be mutually beneficial for both parties involved. It’s not enough to be confident when approaching others, which is probably the most common advice for those looking to master this skill. To make the most of your networking efforts, it’s important to focus on building strong relationships, which requires dedicated time and effort.
So, when choosing who to network with, it’s important to consider what you can offer in return. Think about the skills and expertise you can share, and seek out individuals who you can help and who can help you. Building relationships based on mutual respect and a give-and-take mentality will result in stronger, more meaningful connections. For example, it’s a bad idea to start the connection by asking for help. Rather, I prefer to explain how I can help the person and why the relationship would be mutually beneficial.
One way to build strong relationships is to dedicate time each week to focus specifically on helping others. For me, it’s two hours weekly, during which I interact with people exclusively to help them. For example, have lunch with an entrepreneur who contacts you on LinkedIn or participate in an event organized by someone you know.
Of course, it’s impossible to contact everyone, so one should focus on the potential value they will get. If a person contacts you first, I suggest you create a set of rules to follow when thinking of them or not. Personally, I pay attention to the following:
The size of the business: Founders of early-stage startups will find business books more useful for themselves and are unlikely to help me in return.
The industry: As an EdTech entrepreneur, I usually agree to meet people within the industry. However, this approach may vary depending on your goals and amount of free time.
3. Make it easier for you
Networking can be challenging for entrepreneurs for a variety of reasons. Some may feel intimidated approaching new people, or some may find it ineffective. However, the most common challenge is that one may have limited time and resources to dedicate to networking activities, making it difficult to balance with other responsibilities. By following these tips, you can reap the benefits of investing in networking:
Start by participating in industry events and conferences, even if you won’t be attending with the intention of networking. Taking part in them allows you to showcase your expertise and thought leadership in your respective industry. This can increase your exposure and help build your personal brand, which, in turn, affects your network pretty directly. When starting my business and drawing attention to it through public speeches, I underestimated its impact on networking. But then I found that many people who later helped me a lot came to me on their own.
Practice with friends. If you’re feeling nervous about meeting new people, start by modeling networking with friends and family. We usually give the same advice to salespeople who are afraid to call their clients at first: this helps build their confidence and gives them a solid foundation to reach out to new contacts. I’m sure there is no book or simple rule that will help one overcome fear without practicing, even in an artificial environment.
Utilize LinkedIn and other social media platforms. If you’re unable or prefer not to network in person, LinkedIn is a valuable resource for connecting with others in your field. First of all, it has the same effect on the industry: it’s a great platform to share your expertise. Many underestimate how powerful a connection on the platform can be: for example, it once allowed me to reach out and negotiate calls with all the largest EdTechs in India within just one week!
Don’t underestimate other people’s connections. If you fail to reach a person, ask the people you know to recommend you or get to know them to connect you with your target person. For example, when I fail to reach a venture organization, I try to connect to representatives of their portfolio companies, provide suggestions, and then ask them to connect me with the organization. Guess what? This works extremely effectively, even if it’s just via LinkedIn.
These easy techniques will help you utilize your time most effectively without investing too much effort.
4. Never stop expanding your network.
Networking is a critical tool for entrepreneurs looking to grow and succeed in their businesses. Only by investing time and effort into building strong relationships can you unlock the full potential of your business. The broader your network is, the more opportunities you gain, and the more time you have to find them. Starting may be challenging, but it will become natural eventually.