I’m a big fan of networking to build your business.  I’ve written about how to get started with networking, what to expect when you go to a networking group, and here’s a list of which business networking groups to go along to in Brighton.

So here I want to go over a few things not to do when you’re trying to build your networks and make friends with people, especially when you’re at a business networking event.

While it’s great to follow up and say hi after you’ve met someone, it’s really not a good idea to send this “damning with faint praise” email.

“Just a short follow-up note to say what a pleasure it was to meet you at the BHCC Breakfast on Friday.  Your work sounds interesting and I will bear you in mind for those of my clients who could be in need of your type of service.” I’m really not expecting any referrals from this guy, who has obviously sent the same email to everyone he met that morning, and possibly everyone he has ever met in his whole life, including his mum.

Then there are the people who “work the room” and collect as many cards as they possibly can, without taking any real interest in anyone, and certainly not making any friends.  If you can meet 3 people and have a genuine conversation with each of them, then you’ve had a successful event. Networking is about making relationships, not collecting people like they were football stickers for your album.

And there’s the people who are talking to me, but make it clear that they’re desperately trying to find someone less boring.  If you’re looking out for someone in particular at an event, why not ask the person you’re talking to help you find them. They might be able to introduce you, or help you out with this.  And if I really am boring (I know I can go on about the joy of spreadsheets) and you want to move on, then just say “Shall we mingle?”  Don’t just keep looking over your shoulder for someone better.

When someone offers you their card, please don’t refuse to take it, as I saw someone do to a friend of mine recently.  This guy thought he was doing my pal a favour, as he didn’t want to take a card unnecessarily, but he ended up being ridiculed by me, and upsetting my friend.  You can always throw it away later (although you never know if that person might be useful, so I wouldn’t) but there’s really no need to be rude.  Think about how you might feel if someone did that to you – it wouldn’t feel good.

If you’re desperate to sell something, then please don’t be so very obviously desperate.  The whole point of this networking thing is to make friends with people who may buy from you or encourage their friends to buy from you.   If you rush round telling people about your product, or shoving leaflets at people, they will be disinclined to buy from you, even if you’ve got the cure for cancer ready to be dispensed.

Right, that’s enough ranting about poor behaviour for now…I shall be watching out for more dodgy techniques and will probably rant some more.  Feel free to add your comments about what not to do at networking events.

I see a lot of businesses of all different shapes and sizes. Some businesses I can help, and some I can’t, and I’ve been thinking about the ones which I can’t help, and why not.

Sometimes, someone comes to see me and their business is a tiny little thing.  Now, that doesn’t mean I can’t help them – after all, everyone’s business starts from a little shoot, but not everyone can or wants to grow into a powerful oak tree.  The people I can’t help are the ones who only want to earn 20k a year from their business and are happy with that.  Actually, I often can help with a one off session which my friends at Business Link will fund.  But if your desire is only to run a little business (and there’s nothing wrong with that, little businesses often suit someone who has other priorities such as raising children or sitting in the sunshine) it’s just not worth paying me money to help you.  And I’ll tell people that, and I’ll tell people whether they have a business which could be expanded beyond that lifestyle business level.

Sometimes I see people who have the potential to grow their business, but they are incapable of giving up doing the work on a day to day basis. If you are dead set against outsourcing, or employing people, or if you already employ people but end up doing the work yourself because you don’t trust them, then this might be you.  I can often cure people of these ideas, but sometimes this is so firmly set in that I can’t do anything.  I once went along to a meeting with a client, and when I got to the office he couldn’t see me because he was peeling potatoes.  I thought that the important thing was to talk about setting up a new part of the business which was worth about 100k per year, but he thought the important thing was peeling potatoes.  He couldn’t free himself to think that he could phone someone else to help with the spuds, and he missed out on a great opportunity.  You have to want to develop what you’re doing – otherwise all of my bright ideas are wasted.

The other group of people I can’t help are the ones who just have a rubbish idea.  Often, I’m the first person who’s been brave enough to tell someone that their business is a pile of poo (although I phrase it more tactfully than that, of course.)  Sometimes people just need help to see their business in a different way, so that the idea becomes a good one, so I can help with this, but for someone who is so in love with the idea of a gorgeous shop selling lovely things to all of 4 people a week, or a blog which is covered in google ads which no one ever clicks on, there is sometimes no hope for them.

This goes for the people who think that they’ll get investment for their business, and that their wages will be paid by the investment, with no thought of how the business might ever make a profit.  Sometimes investment becomes the end in itself, and the idea of actually selling some stuff and making money on it is completely lost.  For entrepreneurs like this, a reality check from Julia can make all the difference, but some people just don’t want to hear the truth, especially when the truth is that investment is hard to come by, and almost impossible unless you can show how you’re going to sell stuff at a profit.

Does all of this sound a bit harsh?  Well, maybe it is, but when I’m taking people’s money for my services, I have to be completely sure that I am going to make a real difference, so there has to be the potential for real growth in the business and the willingness to make it happen on the part of the business owner.

Once upon a time, coffee was just a warm beige liquid, maybe with some undissolved granules of Gold Blend on the top.  Then we went all New York, and discovered cappuccino, latte and the delights of the caffeine high.  There was suddenly a rash of coffee shops across the UK, with leather armchairs and noisy espresso machines.  They were exciting and different…for a very short time.  Now we take Starbucks et al for granted, and while the ubiquity of the décor and the fancy names for the coffee may reassure some people who want the same frothy beige liquid in every coffee shop they go to, it becomes very difficult for anyone who wants to attract regular customers to make their coffee shop the one that everyone wants to go to.

This is the same issue that almost every small business faces – most of us are selling something which is very similar to what everyone else is selling. We might know that it’s the best, but how can we be sure, and how do we get this across to everyone else.  How do we make the thing that we care about, that made us start selling this product in the first place, into something that someone else is going to want to buy.

You’d be amazed at how many people don’t seem to think about this, or even to give a damn.  Of course, I’m just banging on about differentiation or unique selling point, which is a pretty basic business concept, but one that unfortunately, many businesses seem to ignore.  Many people are continuing to sell the same old mediocre crap that everyone else does.  They’re selling a commodity – and the only way to make money out of a commodity is to sell lots and lots of it.  Which is what Starbucks does – they sell a lot of coffee, and make big money.  Or they have historically – it may be that the novelty of New York style coffee shops is beginning to pall and fade now as we see Starbucks coffee shops closing down.

So here’s my advice – if you want to make decent money, do something that is worthy of commenting on. I’ve had two coffees today, both in independent coffee shops.  The first was probably one of the best cappuccinos I’ve ever had in my life.  Creamy, thick foam, and wafer thin real chocolate floating on top, which of course I had to immediately eat with a spoon, like a child being given the first icecream of the summer.  And when I told the waitress how much I enjoyed it, she blushed and told me that she makes the coffee with 2 shots because she thinks it tastes better.  She cared whether I had a good cup of coffee.

Now I’m sure she’s on minimum wage + 50p like every other waitress, but I felt good because she cared.  The double shot may have helped as well.

The marginal cost of the chocolate and the extra shot may have cost the cafe around 16p, mostly for the extra shot.  16p for me to bother to take the time to tell the world about the quality of the coffee, and to make sure that I’ll go back there.

How many 16p’s does it take for you to make sure that what you sell is worth talking about – how many 16p’s does it take for you to buy a customer for life?  And how much is that customer really worth for you?

When you want to grow your business, you often need money. Maybe you need money to buy new stock, do some marketing, employ new staff, do some more things.  The banks are reluctant to lend to you, because your balance sheet is looking a bit weak, or you haven’t got enough money yourself to match their lending.  So you want to get some cash from an investor, in return for a share in the business.

An investor is effectively buying equity on the basis that if they give you some cash now, eventually their share of the business will be worth much more.  So if someone were to invest, say, 50k in your business, they’ll probably be thinking that they’ll want to get between 75 and 100k back in 3 – 5 years time.  A better return for them than putting their money in the bank, especially with today’s laughable interest rates, but much more risky.

Things to ask yourself are:

• Do you want to end up with a smaller slice of a big pie, or a big slice of a tiny pie? My experience is that the business owner always wants to keep as much of the business for themselves as possible, but this isn’t always sensible, as a lack of cash in the business means that you’ll always have a little pie.
• What are the strings attached to the cash? If you’re getting money from friends or family, or from an investor who has previously run a business, there can be the danger that they’ll interfere with how you run the business.
• On Dragons Den, people are always looking for the dragon who can bring contacts, or experience into the business, giving you a boost as well as the cash. In real life, this is pretty rare, so you shouldn’t expect this from an investor.
• If you had 100k to invest in a company, would you invest in your company? What’s the likelihood that they’ll get their money back? What’s the likelihood that you’ll all make millions? Think about it from their point of view.
• How will they get their money back? It’s all very well to own part of a business that’s worth a million, but the investor wants to be able to spend that money in 3 years time. Think carefully about what they’ll eventually get back in terms of hard cash.

I advise people who are serious about what they want to achieve and I can tell when someone is ambivalent about their business.  If you’re not serious about it, why would someone bother to buy from you, or do business with you?

1.      When your voicemail message is BT callminder, so people calling you don’t know if they’ve got the right number or not

2.      When you never answer your phone or get back to people

3.      When you use a hotmail or yahoo email address rather than your own domain name

4.      When your website is obviously out of date, and hasn’t been changed for ages – this means that google won’t take you seriously either

5.      When you have are consistently late for meetings.  Being late shows a disrespect for the other person, and makes you look disorganised and sloppy – which is not someone that people want to do business with

Does any of this sound like you?  Any of it sound like people you do business with?  Time to get it sorted – your business can never grow until you take it seriously.