What is the purpose of business networking?

A business network is a type of business social network which is developed to help business people connect with other managers and entrepreneurs to further each other's business interests by forming mutually beneficial business relationships. Business networking is a way of leveraging your business and personal connections to help you bring in new customers, vendors, or just get great advice for running your business. There are several prominent business networking organizations that create models of networking events that, when followed, allow the business person to build new business relationships and generate business opportunities at the same time. A professional network service is an implementation of information technology in support of business networking. Chambers of Commerce and other business-oriented groups may also organize networking activities. There are multiple different types of networking groups though and the best type for each individual varies depending on the business they are in and prospects they want to meet.

Networking works in favor of small businesses as the owners have to dabble with a variety of job functions in a small set-up. When they meet up with like-minded people, they learn from their experiences and get guidance on important matters. They can even find partners and angel investors through a networking group of experienced business owners. A plethora of networking events take place in every country where entrepreneurs can meet, expand their affiliations, educate themselves, and feel empowered. Adopting smart tactics can go a long way in securing partnerships, friendships, and acquaintances.

Many businesses use networking as a key factor in their marketing plan. It helps to develop a strong feeling of trust between those involved and play a big part in raising the profile of a company. Suppliers and businesses can be seen as networked businesses and will tend to source the business and their suppliers through their existing relationships and those of the companies they work closely with. Networked businesses tend to be open, random, and supportive, whereas those relying on hierarchical, traditional managed approaches are closed, selective, and controlling. These phrases were first used by Thomas Power, businessman, and chairman of Academy, an online business network, in 2009.

Before online business networking, face-to-face networking was the only option for business people. This was achieved through a number of techniques such as trade show marketing and loyalty programs. Though these techniques have been proven to still be an effective source of making connections and growing a business, many companies now focus more on online marketing due to the ability to track every detail of a campaign and justify the expenditure involved in setting up one of these campaigns."Schmoozing" or "rubbing elbows" are expressions used among business professionals for introducing and meeting one another in a business context, and establishing business rapport.

Electronic commerce, supply chain management, customer relationship management, and other forms of Business Networking will fundamentally change the way business will be conducted in the information age. We will see close collaboration between processes of different enterprises, and above all, new enterprises and new processes. Business Networking offers exceptional opportunities for fast innovators and harbors fundamental risks for slowpokes. Business Networking proposes a process-oriented model for Business Networking and the concept of networkability to develop realistic strategies for managing enterprise relationships in the Internet economy. It is written to serve academic and professional audiences and formulate key success factors and management guidelines. All ideas were developed in close cooperation of research and practice and are documented in numerous original case examples.

A business network is a complex network of companies, working together to accomplish certain objectives. These objectives, which are strategic and operational, are adopted by business networks based on their role in the market. There are two categories of business networks business associations and company aggregations that help small and medium-sized enterprises (SME) to become more competitive and innovative.

The collaborating companies in a business network are not bound by location, size, sector, or number. They are open to new partnerships that help them to stay competitive. The companies focus on a joint objective and agree on the activities and the procedure to achieve the objectives. The collaborating companies formalize their agreement through a contract that includes the jointly agreed objectives, activities, procedures, duration, decision process, the definition of the parties’ rights, and provisions to enter and exit the contract. The structured collaboration resulting from the contract gives the companies the required skills to become more competitive, innovative, and global, and gain better economic productivity and performance. It also gives companies the advantage of free riding.

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