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Networking: The 800 # Gorilla
Networking is the "800 pound gorilla" in the room for brokering.  This is especially true for those entering the industry on a part-time basis.  The key to successful networking is gaining a high level of working knowledge about factoring and the various alternative commercial finance product areas so you will be recognized by those you meet as an "expert" in small business finance.  In short, an abundance of referrals await you if you can pass the "expert" test.

To successfully network you must be able to do two things well:

A. Impress those you meet with your expertise
B. Place yourself in situations where you will meet a lot of the "right people".

Being able to impress those with your financial acumen means you will need to learn industry products inside out.  There is no other way.  Recent industry studies confirm that 51% of all new business put on the books is the result of networking and referral leaving 49% to some form of direct marketing.  Without an effective networking program, you are leaving half of the business you can potentially generate on the table.

Meeting the "Right People"
Placing yourself in situations where you will meet the "right people" also requires a little work although it has become much easier with the growth of the internet.  Who are the right people?

A. Small Business Owners:  This is obvious as these are your prospective clients.

B. CPAs, Accounting Professionals, Tax Preparers:  Accounting professionals, bookkeepers, etc. all have business clients that need cash and have cash flow problems.

C. Bank Lending Officers:  Banks are strictly regulated and in today's economy, few are lending to those businesses that truly need it.  Additionally, very few community banks have factoring departments so lending against accounts receivable is seldom done.  Banks do not like to turn down loans to their business depositors, however, as this makes the depositors less than happy.  They would much rather refer the depositor to a source (such as you) that can assist them in finding capital.

 

Where to Find "Right People"
Where do the "Right People" meet?

1.  Chambers of Commerce (after hours networking events)
2.  Fraternal Organizations (Rotary, Elks, Kiwanis, etc.)
3.  Clubs (singles clubs, community associations, etc.)
4.  Clubs / Lounges (after hours cocktail lounges and restaurants)
5.  Community Charitable Events (volunteers)

In short, to successfully network, you must strategically place yourself in "Harm's Way".  Do your research.  Try to create a networking schedule that allows you to network with others at least three nights each week.  Always take a large supply of business cards.  Always dress appropriately.

Building Relationships / Staying in Touch
One of the most importance aspects of networking to understand early on is the need to stay in touch.  Networking is like gardening.  Once you plant the seed, you need to nurture it.  With networking it is is simple.  Once you meet a person of influence that can send business your way, you must develop a trusting relationship with him or her.  This means communication and most importantly, contact management.

To build a strong relationship, it is important you focus on those things you have in common with the person and develop a relationship on things you can do together.  We will speak more on the growing importance of social media such as LinkedIn, Facebook, Twitter, etc. in module 27, however, this media is growing exponentially and the sooner you begin to acquaint yourself with its potential, the better off you will be.

After initial introduction through clubs, associations, and organizations, your most prominent networking and relationship building tool is email.  For factoring consultants, the combination of email marketing (especially with a professional monthly newsletter), your website, and a state-of-the-art email delivery / newsletter service such as Constant Contact are the tools of the trade.

Your First Networking Priorities...Expertise
Your first priority for networking will be to join you local Chamber of Commerce which represents a wealth of opportunity for those prepared.  In week 24 we will discuss Chambers in more detail.  It is important, however, that you enlist this opportunity fully prepared.  As it is said, you only have one chance to make a first impression.  Remember, you are trying to earn the reputation of an "expert" in small business finance.  Make certain you qualify prior to to entering the networking world.