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Thursday, March 11, 2010

10 Ways to Waste Your Time in a Networking Group

Referral business from networking groups can pay off handsomely, so make the most of every meeting.

Word-of-mouth marketing is a sure-fire way to generate new business. A single referral can start a chain reaction of new business as positive word spreads. It's no wonder networking groups pay off handsomely in referral business and that membership in a good networking group can be worth a considerable amount of money; especially if you calculate the time you spend each month and the value of that time.

So make your time and efforts worthwhile. Don't squander your opportunity by doing the wrong things in those meetings.

Success in a networking group comes when the rest of the group members trust you enough to open up their best referrals to you. Unless they've seen your work, you have to earn that trust by demonstrating your professionalism to them. Since founding BNI almost 25 years ago, I've seen how people truly succeeded in networks and I've seen how people totally waste their time in them.

Here are 10 mistakes to avoid if you don't want to waste your time in a networking group:

1.Go ahead, air your grievances among your fellow networkers and guests; after all, they really want to hear about your complaints.

2.Wing it in your regular presentations to fellow members--don't worry, you have a mulligan.

3.Use one-on-one meetings to talk about your networking groups' issues instead of learning more about each other.

4.Focus your efforts primarily on selling your services to members of the group.

5.Don't rush to follow up on a referral when someone gives you one. Hey, they know where to find you if they really need you.

6.While other people are doing their introductions, that's the perfect time to think about what referrals you can give that week.

7.Never invite your own guests, just focus on those who show up.

8.Don't worry if you get to the meeting late. No one will notice.

9.Absenteeism, it's no big deal. You can just call in your referrals ... right?

10.Take that phone call and check your messages during a meeting. No, no, it doesn't bother anyone; actually it's a sign of real professionalism that everyone admires.

Imagine how you'd respond if someone in your networking group continually exhibited the behaviors above. Would you be enthusiastic to pass them referrals? Of course not! You'd be hesitant, rightfully, because they've convinced you that they are unprofessional and irresponsible. Of course you'd withhold your valued connections.

We all need to beware of these common pitfalls and take great care to avoid them. They're great reminders that doing business through word-of-mouth marketing requires a special ingredient that only you can supply--commitment.

Commit to the process from the beginning. You have to be an active, responsible, professional, accountable participant and show your fellow networkers the respect, attention, and support that you want them to give you.

You see, the key concept in referral marketing is relationships, and referral relationships don't just spring up full grown--they must be nurtured. Avoid the 10 mistakes on this list because they're detrimental to growing your referral relationships; they will cause the time you spend in your networking meetings to be nothing more than a waste.

Focus on growing your referral relationships by acting in ways that are exactly opposite of what's described above and concentrate on building relationships based on mutual trust and shared benefits. You'll get a lot more out of your group and so will your fellow members.

Remember, if you start putting together your network when the need arises, you're too late. The better way is to begin developing relationships now with the people whose help you will need in the future. Your networking group meetings offer the perfect opportunity and the perfect place to do this. Make the most of this opportunity because there's no room for wasted time. And if you see chronic offenders at your next meeting, print out this list and pass it along.

Called the "father of modern networking" by CNN, Dr. Ivan Misner is a New York Times bestselling author. He is the Founder and Chairman of BNI, the world's largest business networking organization. His latest No. 1 bestseller, The 29% Solution can be viewed at www.29PercentSolution.com. Dr. Misner is also the Sr. Partner for the Referral Institute, an international referral training company.

What to Do When Your Partnership Sours

Even in the best of circumstances, business partnerships can be fraught with conflict. To handle the twists and turns, smart co-owners put a well-drafted partnership agreement in place to act as a road map. Without one, lack of guidance in the event of a dispute can result in a free-for-all for partners, says Jonathan Levitt, a principal with Outside GC LLC, a team of former senior in-house lawyers who act as "on-demand" in-house counsel for clients.

For partners who don't have an agreement, or even those who do, there are a few things they should consider in order to best protect themselves when conflict arises.

First, business partners need to evaluate whether they can mend fences and settle their differences. Difficult issues surface in all partnerships, and they can create stress in the relationship, "but if you work through these issues, you usually have a stronger partnership," says Steven Thayer, an attorney with Handler Thayer LLP in Chicago.
It's important to figure out what's at the root of the friction. Ask, "What is occurring within the partnership that is causing you to make a decision to [want to] sell or liquidate?" says Terry Mackin, managing director at Generational Equity, merger and acquisition advisor for small businesses. It can come down to rifts, family dynamics or other issues. "How are those things affecting the business?" says Mackin.

Business issues such as not making enough money, having too much debt or realizing your business model doesn't work are situations that may require you to adapt and change your business plan to make it work, says Thayer. Of course, fundamental issues that are hard to move past--lying, cheating, stealing or other illegal activity, for example--can be deal breakers and a legitimate basis to terminate the relationship.

Whether conflicts are resolved to make the partnership work is a business decision based in part on each partner's risk/reward tolerance level. "Each partner should regularly assess the risks and rewards associated with their business […] to make sure they are in check," says Thayer.

To that end, ongoing communication and a periodic review of your partnership (especially the agreement, if you have one) is essential. Just as in any relationship, partnerships grow old and co-owners need to reassess how decisions are made, who makes what decisions, etc., says Kurt D. Olender, a corporate attorney in Manhattan.

What do you do if you're unable to resolve your conflicts? At this point, business partners need to determine whether or not one partner buys out the other or both sell out to a third party. In the case of a partner buyout, the two important questions to ask are "Who has the most passion for the business, and who has an immediate cash need that requires them to cash out of the business?" says Steve Nielsen, CEO of PartnerUp, an online small-business networking community. As one would expect, both partners need to agree on the next course of action. In some cases, reaching an agreement may require a good business attorney to act as a sort of "corporate therapist."

Whatever the decision, make sure you hire a good business attorney to help with the dissolution of the partnership. There is too much at stake to use your friend's uncle or some other attorney who is not an expert in business law. Finally, "It is extremely critical that both parties either have their own independent valuations or that they agree on an independent business-valuation expert to determine the value of the business, " says Nielsen.

Most issues, serious or not, can be resolved at the onset through good communication and effective negotiation skills. "Before you resort to the worst case, try working things out by talking," says Nielsen.

Toddi is an award-winning journalist, writer and editor and currently is a contributing writer covering career management issues for The Wall Street Journal.

Thursday, March 4, 2010

Buy a Business Instead of Starting One From Scratch

It is a good time to buy a business, according to Mike Handelsman, the general manager of the online portal, BizBuySell.com. "Many business owners delayed plans to exit their businesses and retire in 2009," he says. "In the latter part of 2009, we started to see clear signs of recovery, and 2010 is now shaping up to be a much more productive year for selling and buying businesses."

Buying a cash flowing business is better than starting one from scratch. It can cost less to buy a going-concern than it does to invest the initial working capital needed to start one up. Furthermore, fixtures, furnishings, equipment and trained employees are all in place when you buy an existing business. There are fewer unknowns and the risk of failure is lower.

But be forewarned that you must do independent research to understand what you are buying because you cannot trust the numbers and descriptions outlined in the business broker's promotional piece. That is why it includes disclaimers and says the broker is not responsible for the information because it comes from the seller.

Furthermore, brokers may not be the best place to begin your search. Many of the best businesses are not listed or advertised for sale.

Begin your search by targeting the industry that matches your skills and background, and has a strong potential for growth. Then, join a trade association where you can meet the industry's business owners. An example is the National Restaurant Association if you want to buy a restaurant. Associations are comfortable places to form personal relationships and spread the word that you want to buy a business.

The recession and credit crunch has turned owners into prospective sellers and they will seek you out. They are burned out because banks refuse to renew lines of credit. Lenders are turning them down for loans needed to replace old equipment or capital for expansion. They are fed up with introducing themselves to strangers every time their bank shuffles loan officers.

Owners dream about a more enjoyable lifestyle. They are tired of supporting employees when there is not enough business to justify keeping them on the payroll. Their jaws hurt from smiling and being polite to rude customers that are looking for bargains instead of quality products and superior service.

You will meet these owners at trade association meetings, conventions and cocktail parties. They will approach you gingerly. They will talk about selling out to a buyer that appreciates their business goals and is willing to carry on the founder's vision. You can become that buyer.

That is how negotiations begin -- by forming relationships.

Over time, the buyer and seller agree upon the selling price, terms and conditions. In the current buyers' market, sellers know that they will have to accept less.

Now is a good time to hook up with a savvy accountant that you will need to help you with due diligence. Add a talented business lawyer to the mix. He or she will structure the legal aspects of a tax-advantaged, lower risk purchase.

Start now or you might miss a window of opportunity while values are still depressed.

Jerry Chautin is a volunteer SCORE business counselor, business columnist and SBA's 2006 national "Journalist of the Year" award winner. He is a former entrepreneur, commercial mortgage banker and business lender. Follow Jerry on Twitter, www.twitter.com/JerryChautin

Follow Jerry Chautin on Twitter: www.twitter.com/JerryChautin

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Cathy Harris is an Empowerment and Motivational Speaker, Non-GMO Health and Wellness Expert, Self-Publishing and Business Coach.