Entrepreneurs should network on several levels

Last week in this space, we talked about the value of networks and networking in today's competitive environment. Because of the increasingly volatile marketplace in which business is currently being done, contemporary entrepreneurs are finding that the need to network on several levels on a continuing basis is a requirement, not an option.

Two kinds of networking were discussed in last week's column: personal networking and product networking. This week, we'll talk about two more ways CEOs and other entrepreneurs should be involved in networks and networking.

Market networking: Developing a marketing campaign, buying media time and targeting the message to buyers in an ever "noisier" environment may still work in some instances. But what seems to be gaining ground in the world of marketing is an understanding on the part of CEOs that people have the ability to find the information (independent of the selling company) that they need/want in order to make a purchase decision.

For example, if someone is car shopping, they can find the competitive price that should be paid for the car, study user reports and opinions on the product, determine which dealer has the best reputation for service, compare competitive financing options and look at the five-year total cost of ownership — all before walking into the dealership.

Virtually every industry is exposed to consumer ratings, blogs, surveys and opinion polls. The corporate marketing guys no longer control the message — the public controls the message and everyone has immediate access to what is being reported.

Some ideas for entrepreneurs: understand that these days there are no secrets. Some of your customers will probably know about your product problems before you do. So stay on top on what is happening in the marketplace. It only took David Neeleman of JetBlue a few hours to understand that he needed to jump into the scheduling mess caused by the weather problems on the East Coast last winter. He resolved immediately to stop the bad press and take a proactive role in turning the tide and seizing the high ground. Watch the Internet for all news on your company and products, be progressive in building and protecting your reputation for quality, service and customer care.

Supplier networking: The purchasing department should look and behave like a high-tech center. View your purchasing function as a high-level information hub — who supplies what, what are the lowest costs, who has the best on-time record for delivery, what outsourcing options exist, how are competitors sourcing/outsourcing materials, etc.

Some ideas for entrepreneurs: Use technology to source your materials, control inventory costs and to guarantee the best pricing. Look for outsourcing opportunities for the parts of your business that do not represent your core strengths. The world is "flat" and you need to source from the lowest-cost alternative that will meet your quality requirements.

Entrepreneurs need to prepare themselves to take the networking leap because the fact of the matter is networking is here to stay. Look for exciting ways to change and improve the business model through networking. My experience tells me that the costs of business are going down and the profit opportunity is going up for those companies that are embracing and utilizing networks.

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Gary Williams is affiliated with the BYU Center for Entrepreneurship He can be reached via e-mail at cfe@byu.edu.

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