How to Network Effectively

Networking is getting to know people whom you can help and who can help you. Here are four steps to make your networking work.
4 min read
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Networking is the art of making and utilizing contacts. The goal of networking is to create a pool of people and information that can directly increase the quality of your product or service, decrease customer attrition, and, most importantly, leave your competition wondering how you won a job they never knew was available.

Many small business owners don't want to network because they think its about shoving your business card in someone's hand and boasting about what you do. In fact, networking is actually about getting to know people whom you can help and who can help you.

Networking expert Steven M. Krauser, President of Network Associates, Hicksville, N.Y., contends that most business people don't know how to make networking an effective business tool. "If the result of your networking is a stack of business cards in your top right hand desk drawer and not a lot of additional business, then it may be time for you to re-evaluate your methods", he notes.

Krauser says small business owners should approach meeting people using two goals: get to know as many people as possible, and get them to know you. He then recommends the following four steps to make your networking work:

Give and get information

Networking is a two-way street. When you meet someone, you want to ask them about their business and tell them about yours. Start with the basics - name, company, affiliation, position, nature of business, etc. You next want to find out if you can benefit each other. Try covering these topics:

  • What does your company do?
  • What types of clients do you serve?
  • Who makes the buying decision within a firm for each of your services and/or products?
  • What sets you apart from your competition?

Evaluate the value of the contact

You can't network thoroughly with everyone. Once you have the preliminary information, you need to decide if this person is worth meeting again and creating a relationship with. Can you help them and can they help you? The answer should be "yes" to both.

Another criterion is to look for people who are truly interested in helping others solve a problem, no strings attached. In other words, don't think of yourself as a networker but as a problem solver, and look for those same characteristics in someone you will consider adding to your personal network.

Form a strategic alliance

A network is not a collection of business cards, but of people. Take the time to understand the business of those in your network. If you've chosen members wisely, this should be a pleasure. And make sure that you educate them completely about what you do and whom you do it with. Give each other updates and encouragement. In effect, you become each others' sales people.

Remember that the purpose of networking is not to get your contact's business; instead, you're trying to get business from everyone this person knows.

You should also be able to turn to those in your network for management ideas, advice, leads, even vendor recommendations. You will learn from each other and contribute to each other's growth, both in terms of profit and performance.


As your contact base grows, you have to re-evaluate the people in your information loop. Practice effective time management skills and prioritize your contacts. You will want to get in touch most often with those that can be most useful to you. They will become your inner circle.

Be careful never to burn bridges; you never know when someone will be able to help you, or when you will be able to help them. If you feel as though someone is not useful to you right now, you still will want to check in with them now and again, because they may become important down the road. In other words, be nice to everybody because you never know where they'll show up.

The views and opinions contained herein are not necessarily those of American Express and are intended as a reference and for informational purposes only. Please contact your attorney, accountant or other business professional for advice specific to your business.

Copyright © 2002 American Express Company. All Rights Reserved

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