Networking is generally an excellent way to do business; if it is done right.
My networking method is simple: we maintain the best possible business relationships with our suppliers. How do we do that? By paying on the nail as soon as a job is done and by referring trustworthy suppliers to our own clients and other contacts.
When we set up our first office, the signage supplier was amazed to be paid the day he invoiced us. When my accountant visits for our year end, his fee is in his bank account before he gets back to his office.
That said, another accountant once told me to my face that I was stupid to pay suppliers promptly. He strung everyone out as long as possible. The old government-funded Business Link “guru” had told me much the same. Ten years on, that accountant’s business is on life-support and Business Link, whose “advice” was among the most worthless I have ever had, is effectively defunct.
In the meantime, most of our suppliers have become our clients and have referred many others to us. It is an old-fashioned view, I know, but I have always believed that the worker has the right to his pay once the job is done.
The result is that whenever we need a job doing, we get it done by professionals we feel comfortable referring to our clients. That is important to us. We want to do all we can to prevent our clients being ripped off.
Builders, electricians, plasterers and plumbers all feature on the trusted list we give clients, along with the likes of accountants, lawyers and architects.
My experience of formal networking has been less enjoyable. I joined one of the best-known franchises in 2002, which originally consisted of small and medium-sized business owners. Membership was eagerly sought and standards were high. Copycat groups and the franchisee’s eagerness to maximise profits ruined it.
In theory, it operated a “one member per category” rule but categories were sliced and diced to rake in more fees while reducing the quantity and quality of referrals. The shift in emphasis from quality to quantity of members also resulted in a preponderance of homeworking pill-pushers, magic bracelet sellers and unqualified amateur medics of all stripes, including “counsellors” dabbling in amateur psychology.
I would not readily put anyone else’s business down but there are some businesses nobody should be in unless properly qualified; the two most obvious being health and wealth. We were expected to trust snake oil salesmen who were often treating the client with one hand while holding the “how to” manual in the other. Suspension of disbelief was never part of my skill set so I quit.
I seriously doubt the franchised model for networking groups remains viable. If I were to start my own group I would run it as a co-operative, with no fees to pay to any franchisee. I would also run it on open and democratic lines, not the secret squirrel club model it used.
But if you want to network successfully without being part of a formal group, the formula is simple: be a good, fair, paying customer.
Neil Liversidge is managing director of West Riding Personal Financial Solutions