A couple of days ago someone wanted to give me some feedback about the Brighton and Hove Chamber of Commerce breakfast event that morning. I’m President of the Chamber, so I always want to hear what people have to say.

The main point from this guy was that he didn’t feel that there was enough time for networking at these events. In case you haven’t been to one of our breakfasts, the format is that everyone comes in at 7:45, has coffee and pastries and circulates and chats for about 30 minutes, then we sit down and have breakfast. After breakfast there’s a speaker for about 15 – 20 minutes, usually someone who is talking about their own business journey and passing on some ideas and inspiration. By 9:30, we close the meeting and some people go off to work, and some people hang on and have a bit more chat.

Mr Feedback’s problem was that he didn’t get to meet enough people. What he wanted to do was meet as many people as possible, see if they wanted to buy anything from him, and if not, then move on to the next person. This is called working the room.

My experience

For me, this is a real misconception about networking. I had been at the same breakfast that morning, and I’d spoken to Peter, Rosie, Toby, Rebecca, Rebecca’s friend, Robert and Mark.

I’d said hello to about half a dozen more people, and I’d been able to get hold of the guy that Rebecca wanted to speak to and send him over to her. For me, this is plenty enough people for one event. I want to be able to have in depth conversations with people, and to say hi (therefore reminding them of my existence) to others. I don’t know if there will be any direct business benefit to me from going to particular breakfast, but I know that I learnt some interesting things from the talk, found out something new about Robert which might be of use to one of my clients, and that I had fun. Again, that’s plenty, and well worth the twelve quid.

The risk of working the room

If you work the room, your desire to separate the wheat from the chaff means that you risk offending the people you discard. Those people are not going to want to be your friends.

Very few of us sell anything the first time we meet someone, especially if you sell services (this doubles if you sell complex service). So if someone doesn’t want to buy right now, make sure that you establish a good relationship with them, because they might want to buy later. And of course, they might not want to ever buy from you, but you want them to remember you and like you, because you want them to recommend you to their aunt’s boyfriend’s best friend, who does want to buy whatever you’re selling.

Don’t be a doggie

The other risk with working the room is that you can look needy. You’re like a doggie, sniffing each person to see who is going to give you the money. And no one is going to trust you or buy anything if you appear to be desperate.

Don’t be tempted to work the room – networking is a long term game, with big potential results. Some of the people who have done me the biggest favours in business have been people who I’ve known for years, and who are very unlikely themselves to be my clients, but I’ve got to know them and they’ve been incredibly helpful, recommending potential clients, setting up speaking opportunities (where I do meet potential clients) and media opportunities. You only need a handful of great people like this to make the difference.

You’ll know that I’m a big fan of using LinkedIn to develop your business, and you’ll see from my profile that I use it a lot to keep track of all the lovely people I meet and want to stay in touch with.

Because I find LinkedIn useful, and pay attention to what comes through from my network there (I even have a special folder for their emails), I find it particularly annoying when people spam me. Recently, I’ve received a rash (I think that’s the correct collective noun) of invitations from people I don’t know, inviting me to join them on LinkedIn. I click through, thinking that I must have forgotten someone’s name, but no, it’s either someone completely random, or it’s someone who is connected to other people I know, but I’ve never met this person. I’ve been trying to figure out why this is – forgive me if this is me being a bit slow, but I’ve finally figured that these are either:

• People trying to get a look at my address book. On LinkedIn, you have to have your connection accepted before you can see someone’s contacts, so these people are pretending to be my friends, so they can take a sneaky look at my real mates. This one made me say naughty words out loud. I’ve spent years building up my social capital, and I’m not going to just give it away so that these lazy people can spam everyone.
• People who have been recommended by LinkedIn’s software that they might know me, so they send me an invitation to join them. I’m not swearing so much about these people, but I do wish they’d read the instructions before pressing the button. It says, “you might know Julia”, not “this is a good way to meet Julia”. If you want to meet me, send me an email, or ring me up (especially, but certainly not exclusively if you think I might be able to help your business).

LinkedIn explicitly explains that you should only invite people you know. And if you invite too many people you don’t know, you’ll get banned.

LinkedIn is just a networking tool

LinkedIn is there to help you to network – it’s just a tool. It doesn’t do the networking for you – it doesn’t build relationships unless you already have a real relationship with that person. Otherwise, they’re just going to think “who the hell is that?” And when you’re trying to build a personal brand, that’s the last thing you want people to think.

So don’t be lazy – get out there, meet people, make friends, and stay in touch with people. That’s networking. Adding lots of people on LinkedIn that you don’t know is like stamp collecting, but less interesting.

Other articles about how to use LinkedIn for business:

A guide to using LinkedIn for business – the starter’s version

LinkedIn for business – the advanced class

Phoenix by jurvetson

Since the recession began, I’ve seen an increase in the number of business phoenixes. A phoenix happens when a business closes down one day, and then opens the next day as a completely new company, but with the same staff, directors and customers. You can usually tell this has happened by a slight change of name, a different bank account, and the directors looking exhausted but relieved.

Businesses usually phoenix (if we can use it as a verb) because they are in trouble and have big debts around their shoulders. Ethically, the difference seems to be that some businesses phoenix because they would not survive otherwise with their huge debts to the banks and some businesses phoenix in order to avoid paying their suppliers. You can tell the difference because the second category (the unethical ones) phoenix again and again. They’re the ones where the directors have taken all the money out of the business before closing it down – you can recognise them when the director is driving a Lexus but telling you that they can’t afford to pay your invoice.

In essence, creating a phoenix company is fairly simple. You put one company into liquidation and open a new company at the same time. The new company now does whatever the old one used to do for the same customers, with the same staff, and a very similar name and brand. Quite often you don’t notice the difference – you could be sitting next to a phoenix right now.

Pros and cons

If you’re thinking that this might be a great way to ditch some of the hassles of business life, such as that troublesome loan which the bank seems to think you will pay back, or that useless member of staff, then do think carefully.

A phoenix strategy has some things going for it, but there are also some serious disadvantages.

• A phoenix has to be done properly and legally otherwise you’ll end up still owing the money but you won’t be able to pay it back because you’ll be in prison for fraud. Get the right advice, from an accountant who has done this before (many accountants haven’t) or preferably an insolvency specialist.
• A phoenix has major long term consequences. You could have that bird around your neck for the rest of your life. If you put a company into liquidation, you are unlikely to ever get a loan again and you’ll have difficulty getting personal credit, even for small items. Some people who have been through this have had difficulty opening bank accounts or setting up online payments, even years after the event.

When you might have to

I’ve worked with three businesses in the last year who have phoenixed. They all tried everything they could to keep the original business going but, when the banks withdrew credit, the directors had no choice. The only alternative was to close down the business for good, and make everyone redundant with no severance pay and walk away. The phoenix was the lesser of two evils.

When it’s bad

A bad phoenix, like most bad actions, has a malicious motivation. When a business owner does this because they have been reckless or greedy, paying themselves big wages when the company isn’t paying suppliers, spending money on lazy, crazy marketing activities such as PR to promote the owners’ egos rather than the products or buying expensive things like cars, or in one case I saw, a giant fish tank for the office when staff hadn’t been paid that month. The company’s assets get sold to the owner’s mum for a fiver at liquidation, and you see Mr Dodgy driving his (sorry, his mum’s) sleazemobile a week later.

How you can make it better

If you’re in a bad situation, and are thinking about phoenixing, or you’ve done it and are feeling morally icky about it, there are some things you can do to make it better.

Firstly, protect the little guys. If you owe your suppliers, and can’t pay them, unless you talk to them they will hate you. Make sure you know that the small companies you owe money to know that they’ll get their money later. A client once paid me the last part of the fees she owed me a whole 5 years after I’d done the work, and I respect her for taking the trouble to do this.

Secondly, ensure that your staff know what’s going on. Staff always have a good idea of what’s going on, and if you tell the truth it will usually be better than the worst case scenario they’ve been imagining. If you’re intending to take staff with you to the new company, this is especially important as you don’t want them to jump ship.

I’ve already written about using LinkedIn for business and this article is great for people who are just starting out with LinkedIn. Now I want to talk about using LinkedIn as one of your essential tools to really lift your business, and help you make the most of your networking.

You can use LinkedIn as a business development tool in many different ways. Here are the three I want to concentrate on here:

• Developing your status as an expert and a lovely person
• Reach out with your brand
• More direct business development

Developing your status as an expert and a lovely person

I’m assuming that you have already given some thought to your profile, and that you’re keeping it up to date. Lovely photo, you look good there, by the way.

The next thing to do is to develop a good number of testimonials on your LinkedIn profile page. I just had a look at a handful of my LinkedIn contacts, and they averaged 3 recommendations, which is not enough to form a decision on. 3 recommendations looks a little half hearted. Potential clients will be looking at your LinkedIn profile, and trying to decide if you’re the person they should work with. So you need to make sure that other people are telling them that they should give you lots of money. LinkedIn is the perfect place to get people to write good things about you.

Remember that you want a good handful of recommendations, don’t be one of those people that have hundreds of recommendations as no one will ever read them, and it’s either going to look like complete overkill, or like you’ve spent your life asking people to recommend you. I have 20 on my page, which is more than enough to tell you that I’m one of the good guys.

Reach out with your brand

You want people in your network to remember you, understand what you do, and think well of you. That way, they will recommend you, buy from you and create opportunities. And LinkedIn can be a fantastic tool for reminding people of who you are, and getting a chance to get your brand in front of some new people.

If you’ve only really been using LinkedIn as an online cv, and a way of collecting some contacts, you’ll probably have missed some of the great new features they’ve been adding. Have a look around at some of the LinkedIn groups and work out which ones apply to you, and are relatively active. By joining up, you’ll be able to see what other people are up to, and learn what’s going on. It’s better to lurk a little first to get the hang of things, and then start joining in debates or helping out with referrals and advice.

More direct business development

One of the things I often recommend to clients is to put together a hit list of the people they want to work with – your target clients. I’ve just done this with a client who wants to sell to businesses based in Brighton who do business outside the city, for example. We’ve now got a spreadsheet of names to start contacting. Now, I wouldn’t advise using LinkedIn to contact these people – you need to be a lot more subtle than that in your hunt. However, LinkedIn is invaluable in finding the people you want, and getting lots of interesting information about them.

Maybe you know that you want to sell something to Giraffe Ltd. You know from their website that Mr Frog works there. So you look up Mr Frog on LinkedIn, and find out that he used to work for Hippo Ltd, and where your friend Ms Lioness still works. So not only do you know exactly what Mr Frog and Giraffe Ltd do, and that he is the right person to talk to, you can also ask Ms Lioness to either introduce you, or if this isn’t appropriate (maybe Ms Lioness doesn’t know him that well) she can give you some more really valuable information, such as does he like phone or email, or where does he hang out.

This approach only works well if you’re looking for high value business to business sales, but in this area LinkedIn can be a remarkable tool.