Networking in Entrepreneurship: Why it is Important?
By Tigran Ghalumyan
Firstly, the term networking in entrepreneurship refers to creating and maintaining social contacts that can help businesses meet their needs. Nowadays, one of the most important things that entrepreneurs have to think about a lot is to strengthen their networks. Furthermore, it’s been said that business is all about who you know.
Networking is the No. 1 unwritten rule of success in business.
Sallie L. Krawcheck
/CEO and Co-Founder of Ellevest/
Businesses and business owners are involved in a wide variety of social relationships, from formal inter-organizational networks to informal networks, such as partnerships and family connections, both of which influence decision-making and business efficiency (Turkina, Van Assche, and Kali, 2016; Turkina and Thi Thanh Thai, 2013). Also, by reducing transaction costs, creating market opportunities, and producing knowledge spillovers, social networks accelerate business growth.
According to the research report made by the Economist Intelligence Unit (EIU), for 78% of startups, networking is absolutely necessary for entrepreneurial success (Economist Intelligence Unit, 2016).
Why it is Important?
Firstly, we will underline the importance of networking in entrepreneurship. Undoubtedly, networking is one of the most valuable skills that you could learn in order to make your company a success story. It takes a lot of time and effort to create a successful company, so it is reasonable to have a network of business partners and associates to draw energy from and keep you motivated. Besides, you are more likely to step forward and achieve success by connecting yourself with others who share a common enthusiasm and way of achieving goals. In addition, business networking is a very valuable way to extend your skills, learn from others’ success, get new customers, and tell others about your business.
Hence, the 5 biggest benefits of business networking:
- New business
- Growing your personal profile
In other words, through networking in entrepreneurship you can help your business grow and become more successful (Pretorius, 2017).
Ways to Improve Your Entrepreneur Network
Do not worry if your entrepreneurial network isn’t where you’d like it to be. Instead, you should always be expanding and improving your network as you continue to grow and networking will probably never stop. However, if you want to concentrate on enhancing and developing the network sooner rather than later, here are some tips to help you do just that.
You should join online communities through the Internet as well as get involved in your own community. Also, take part in different social events and be prepared by having business cards and give them to others. In short, just talk to everybody (Wither, n.d.).
To sum up, we must mention that undoubtedly, the advantages of networking are many. For this reason, entrepreneurship networks are a strategy for the survival and success of small businesses. Thus, to be a successful entrepreneur, it’s critical to obtain a variety set of networks for yourself as well as to set up a successful new business, you must make relations with those who you believe can help you gain better results. So by finishing, we should mention that the bigger network is, much better results.
Turkina, E., Van Assche, A., & Kali, R. (2016). Structure and evolution of global cluster networks: Evidence from the aerospace industry. Journal of economic geography, 16(6), 1211-1234.
Turkina, E., & Thai, M. T. T. (2013). Social capital, networks, trust, and immigrant entrepreneurship: A cross‐country analysis. Journal of Enterprising Communities: People and Places in the Global Economy.
Economist Intelligence Unit. (2016). Informal innovation. The Economist Intelligence Unit (EIU). https://eiuperspectives.economist.com/technology-innovation/informal-innovationfbclid=IwAR0cZWcSY_5DAIitplNz5VIbFAdgFYA363vx8W0T_M9HfoxLGqcfYIXZqkE
Wither, D. (n.d.). 6 ways to improve your entrepreneur network | Startup grind. Startupgrind. https://www.startupgrind.com/blog/6-ways-to-improve-your-entrepreneur-network-2/
Pretorius. (2017, May 3). The importance of a strong business network. SucceedGroup. https://www.succeedgroup.co.za/2017/05/03/the-importance-of-a-strong-business-network/