I used to think graphic designers were cool.
Then I became one.
Now, every 6-12 months, when I get a lull in orders, I like nothing better than to crack open a new spreadsheet, review all my recent projects and categorise where they came from.
Rock and roll!
And once I’ve done that, I work out each channel’s ROI (return on investment). This exercise helps me to understand which ones are paying their way and which I need to chop.
I know! It’s this kind of hedonism that gets me invited to all the best parties.
Anyway, I’m pleased to report that, over the previous 12 months, business networking more than paid its way. Two of my business networks provided a 500% ROI, and a third generated an ROI of over 1000%.
Which is amazing news.
It’s even more impressive if you reflect on the state of small business networking at the moment. Because it is a shadow of what it used to be.
This article is in two parts. The first one will discuss the current state of small business networking in the UK.
I’ll explain how I make my networking profitable in the second part.
Here’s part 1.
The State of Small Business Networking
To give some context to understand where we are today, it’s helpful if I paint a picture of the networking landscape as it was up to the end of 2019.
The world of small business networking was a peculiar mix of camaraderie, strategy and the frequent exchange of business cards.
It was a world of possibilities, where the term “networking event” could mean anything from a casual buffet to a highly structured gathering resembling speed dating for entrepreneurs.
Meetings varied from purely social affairs, which felt more like a party than a business opportunity, to early morning gatherings with an unspoken dress code that screamed, “Don’t make small talk with me, I’m here for business.” And there were plenty of events which met somewhere in the middle.
Some networks were open-minded, allowing various businesses of the same type to join the party, while others enforced rigid single-seat policies like the eleventh commandment.
Oh, and let’s not forget the price tags – from the budget-friendly mixers that didn’t break the bank to the exclusive, wallet-weeping membership organisations that should come with a red carpet at every meeting.
This mixed bag was the in-person networking environment until the pandemic. There was something for everyone.
2020 was a terrible year for many of us personally, and for business networking organisations, it was nothing short of catastrophic.
COVID lockdown meant NO in-person networking could take place for an indefinite period. For the networks, no meetings meant no income.
The networks had to adapt to remote work and social distancing very quickly.
Many of them shifted their events and meetings to online platforms, like Zoom and Microsoft Teams, to ensure the safety of their members. While this innovation kept the networks alive, it also led to the loss of many people who did not find online networking to be a valuable substitute.
Other networks didn’t (or couldn’t) innovate, and they simply gave up and folded, never to return.
No one knew how long the situation would last, and many (myself included) tried online networking and, for the most part, found it wanting (and that included helping to run an online meeting for six months).
I could not wait to return to good, old-fashioned face-to-face networking. But when it finally came, in the summer of 2021, things were very different.
- People were extremely wary of going back to in-person meetings
- They had got used to the time and cost savings of not driving to meetings
- The venues we’d previously used were unable or unwilling to accommodate us (for reasons we’ll cover shortly)
- Networking organisations’ membership numbers were a fraction of what they once were – old members had new priorities, and our pre-COVID mailing lists were mostly useless.
After 18 months of being traumatised by blanket news coverage of death, disease and government incompetence, you can’t blame people for wanting to stay at home or save money.
The venue issue came as a surprise, and the reason, at first, was mainly due to Brexit. Hospitality staff had been comprised largely of EU and non-EU migrant workers. These people were urged to ‘go away’, which they did, forcing short-staffed venues to cut their opening hours.
For example, our local 8 am breakfast meeting venue (in 2019) now opens at noon, with no sign of wanting to return to opening any earlier.
(Eight o’clock was the most popular meeting time before COVID. Now, none of our current venues open that early. Today, I only do 8 am meetings online.)
In the months that followed, the situation with venues only got worse. Supply chain issues (Brexit again) affected food supplies. Then inflation, the fuel crisis, and the geo-political situation pushed prices to the point where running networking meetings and making any profit were almost unfeasible.
Independent venues were the worst affected. In the winter of last year (2022), I remember attending an evening meeting in a restaurant where they had not turned on the heating because they couldn’t afford to.
Our venues before 2020 were wide-ranging, from golf clubs to pubs, restaurants and hotels. Most of the meetings I attend now are held in restaurants attached to nationwide hotel chains, where they have the staffing levels and economies of scale to keep their prices just about within the budgets of networking organisations.
It’s over two years since we returned to face-to-face networking, and as we slowly rebuild, chaos continues to reign.
Small Business Networking Has Changed Forever
I was lamenting the lack of attendees at one of my meetings a while back. I found myself comparing the old pre-2020 networking scene with today’s — a pointless activity, I know, but a natural one, too.
A New Networking Mix
Back in 2019, there was almost no online networking. Today, it’s everywhere, very cheap to set up, and of variable effectiveness.
Networking organisations have been forced to innovate. As well as in-person and online meetings, you can now attend speed networking (not for me, but many people like it) and netwalking (combining networking with a gentle walk).
There is greater choice but (I believe) a smaller pool of attendees. Many of my old small business networking colleagues have shuttered their businesses, gone back to employment or taken second jobs. People have less money to spend, and consequently, many cheaper but less effective options have sprung up to attract cash-strapped businesses.
Memberships and Revenue
The uncertainty brought by both the pandemic and Brexit led to drops in membership. Many members had to cut back on expenses and let their memberships lapse.
And like those businesses, networking organisations themselves faced financial challenges. Cancelled in-person events and uncertainty about membership renewals affected their revenue streams badly.
Venues are fewer and more expensive and don’t always open at convenient times. In 2019, within 25 miles, I could attend sixteen different in-person meetings every month (within just one network). Today, I can visit six. And those meetings have fewer attendees, yet they cost more to attend.
But there is no going backwards. The *insert your network name* of 2023 is totally different from the pre-pandemic version. It may have the same brand name, but its operating environment has changed completely.
We must adapt and work with what we’ve got. There is no point saying, “this used to work then, so it should still work now”.
Because it very often doesn’t.
It’s Not All Doom and Gloom
While the networking environment has fragmented and is much more challenging than it used to be, networking is still a highly effective promotional and marketing activity if you do it right.
In part 2 – How I Leverage Small Business Networking – I’ll share my experience and cast some light on how I make my networking highly profitable.