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The following article was published in the Charleston Post & Courier's Business Major, a featured monthly column in the Business Review Section on June 29, 1998. Networking keeps entrepreneurs afloatBy DOROTHY P. MOORE Special to The Post and Courier In addition to day-to-day operating concerns, businesses must deal with the continual flow of information vital to success and simultaneously keep abreast of changes. Sorting it out is more than any one person can handle. The only way entrepreneurs can cope is to network. As a Chicago entrepreneur puts it, "Without the personality, networking, connections and the ability to put the pieces all together, one can't do well." Other entrepreneurs agree: "The more people who know you directly, the more difference there is in the choice of your products." "Business is built on the basis of quality, it's not cold calls. It's the contacts and referrals." Entrepreneurs need to begin networking before they launch their businesses. A large body of research describes the positive impact networks have on business start-ups. The common finding is that the exchange of information among potential entrepreneurs is considered so vital to managerial and entrepreneurial development that, without such support systems, ventures are less likely to be successful or even created. Entrepreneurs often acquire networks naturally. Patricia Droppelman, president of Pediatric Nursing Care Inc. in Cincinnati, who initially had received little encouragement to start her firm, networked outwardly by doing what seemed logical and familiar. "You had to run a house, you had to pay the bills and you couldn't pay any more than you had in your pocket unless you wanted to go into debt. Unknowingly I had established a relationship with a banker and he knew me when I needed money. My accountant really believed in my company. I didn't know these areas but I could count on them in the areas where I needed the advice. "It always worked out in the way I wanted to do it. After a couple of years I found a law firm that believed in what I was doing." Other entrepreneurs deliberately set out to construct networks that could help them. "When I started my business," said the owner of one real estate firm, "it was some women executives and some real estate firms who made sure that some business was thrown my way." A Louisiana entrepreneur used her high-level access to gain business contacts. "At one time I sat on seven boards. At my first board meeting, my husband said, `They will make you secretary because of being a woman.' Well, I am a secretary. And I am going to be president of the board in three years. I showed my capability this way. Involvement is important and the networking is important." Entrepreneurs craft their networks to suit differing interests. One Kentucky entrepreneur designed her networks to support other women. When she started her business, she sought out a female attorney, a female CPA, and a female travel agent to try to give her dollars to support women. She continues this policy to this day. Patty M. Breeze, another entrepreneur from Kentucky, took a different approach. "I took the advice from one of the people in the business to stay away from family and personal friends, but instead go to outer circles - to use acquaintances. As I have progressed in my career, I have become very aware of networking with other professional women, women who own their own businesses, who are employees, who are attorneys, CPAs, executive directors, bankers. In the last couple of years I have become more involved with professional women's groups. I always try to pass business on to clients of mine." Clearly, there are no hard and fast rules. Network contact possibilities are nearly endless. If successful entrepreneurship begins with extensive connections to others, where and how do most entrepreneurs begin? Sometimes they acquire networks through contacts in businesses owned by family members, close friends, peers and former employers. Men and women benefit similarly from these associations. Most often entrepreneurs forge their first business networks within their former companies. Contacts, the identification of opportunities, potential partners, customers and sources of financial backing are among the benefits of first starting in corporate life. So important are these contacts that one researcher suggests the key to successfully starting a business is simply one's movement from entrepreneurial "know-how" to entrepreneurial "know-who." Discussing the impact an organizational restructuring had on her business, Elizabeth Morris of Dallas offered a compelling illustration of how such contacts had worked for her: "Some of my clients went to the Northeast, some of them went to the Midwest, some of them went north, west, and south. So, we tracked them down. And all of a sudden, inside of a year's time, I had a national company. They had liked the quality of our work so they took us with them as preferred subcontractors to their new companies." Networks may be structured or casual. Some research indicates that informal networks are more important than formal ones. Among the most important kinds of support for starting one's own business are resources obtained through social networks (material support), emotional support for the idea of starting a business (affective support), and advice on finance, production and other matters (information support). Consistent with other research, we found that the development of contacts is not only important to beginning a business but also to firm development. We also concluded that business growth appears to be significantly related to the time entrepreneurs spend developing contacts within such strategic interest groups as customers, suppliers and investors. Entrepreneurs we interviewed felt that belonging to a network added an important value-added dimension; the ability to create important contacts, to find an opportunity for teamwork without financial strings, and the chance to associate with those who could enhance business performance at a personal or financial level. Entrepreneurs also considered networks important to developing one's support system. Networks offered the opportunity to construct sounding boards and exchange ideas, to join active negotiating groups, to acquire training, to access resources, and more. Nearly half the entrepreneurs in the study ranked networking first or second among the skills they took from their previous organizational environments. For Questions/Comments about this site, contact dot.moore@comcast.net. Site designed by Jackye Cocoros. |