ENTREPRENEURIAL NETWORK 4
Inbusiness terms, entrepreneurial networks are social organizationsthat offer different resources to begin or enhance commercialprojects. Enough human resources are essential factors to achieveentrepreneurial goals. Good leadership and the entrepreneurialnetwork are vital social systems for the proper operation of aproject or a business. Besides, they distinguish a business fromidentical developments. Most entrepreneurial networks aim to bringtogether resources and selected professionals to complement eachother’s activities. The primary priority is to help successfulbusiness launches. Consequently, the systems provide direction,motivation and increase access to available opportunities, as wellas, other crucial skills. Networks aid in the promotion of members’services and talents both in an entrepreneurial network and in abroad market, therefore, it increases opportunities for everyone. Thecentral need in every investment is startup capital whileentrepreneurial networks emphasis on offering financial resourcestailored to the needs of members in a certain demographic region(Peneder 2009, p. 78). Investments are strategic and equallyindefinable concepts, so successful entrepreneurs understand that thestrength of a business is in making the right connections.
Thelinks are essential for industry growth irrespective whether thatassociation is for prospective business alliances, marketing, salesor supply chain management. Extroverts make connections easilycompared to introverts. Excellent investment relationships providediverse incentives to the concerned people. Entrepreneurs can use sixproven tactics to achieve desirable links with other businesses.
Theprimary aim of this study is to discuss the importance ofentrepreneurial networks to investors. The paper will also discusshow capitalists can establish real networks. In the literaturereview, I will discuss three articles related to entrepreneurialnetworks.
Accordingto Dubois (2014, p. 2), entrepreneurs require six major practices toestablish superb connections. The first requirement is a startupplan. Superior businesses begin with a fine model therefore,entrepreneur networking should be part of that good plan. In mostcases, investors ignore the significance of networking thus makewrong connections. Second, an entrepreneur should choose where tofocus. Time is a valuable commodity that one must decide where tospend it. Capitalists should get involved in events that feed theirminds and business. The third step is the application of the “hostessprinciple”. Once the entrepreneurs select events, they go straightthe group of people and make excellent introductions (Dubois 2014, p.3). The primary intention is to act as a convener of that event andmake everybody comfortable. Fourthly, make high-qualityrelationships. The aim of attending an event is to familiarize withnew potential clients instead of acquiring several business cards.Therefore, it is vital to be honest and genuine. To develop healthyrelationships, one must have time to nurture that relationship andhave good communication. Fifthly, build and maintain the network. Itis easy to acquire long-term connections through LinkedIn, Twitterand Facebook platforms. Finally, the author asserts that businessescan also generate bonds through helping competitors to accomplishtheir goals. When rival organizations pool resources, theirdevelopment potential increases substantially (Dubois 2014, p. 2).
Consequently,Misner (2011, p. 1) adds that network strategy is based on threeprimary pillars. As such, many entrepreneurs find it hard to decidesuitable networking events to attend and the ones to skip. They findit hard because their focus is on return on investment. In manycases, investors weigh between benefits and resources, as well as thetime they will spend to make networks. Therefore, it is vital for anentrepreneur to have strategies that will assist him or her toidentify people to connect with and where to find them. The followingare three important issues that entrepreneurs should consider whencreating networking strategy as proposed by Ivan.
Mostbusiness entrepreneurs cannot describe their best prospects. Some saythat anyone can become a potential client while others give a vaguedescription of excellent customers. Because of the problem, mostentrepreneurs try to attend diverse networking functions. However,most of them end up not getting good business connections out oftheir networking efforts. Ivan argues that a good network strategycan help eradicate the problem. He says that entrepreneurs shouldlook at their past client list in case they are not sure of the rightcustomers’ contacts, they industries, and how long they have beenin a business (Misner 2011, p. 1).
Whereto Meet the Best Prospects
Ifan entrepreneur what to reach the best prospects, he or she shouldspend more time at the chamber of commerce, with referrals, or localbusiness associations. Although attending chamber of commerce andbusiness association events is a good starting place, there are otheropportunities and venues, which fall outside regular networkingevents that can benefit a business to evolve. In case, anentrepreneur is interested in meeting representatives from bigorganizations, Ivan recommends that he or she should attend nonprofitgroups, volunteer work, and service clubs. Attending meetings ofhomeowners is another good way of meeting best prospects (Misner2011, p. 2).
TheExact Best Prospect
Theprinciple of creating a right connection is found in a simple precept"You don`t know who they know." The concept is that thebigger the number of business networks an entrepreneur hook up with,the better the chances of short contacts chain between entrepreneurand the person he or she care to mention. An entrepreneur shouldrecognize the information and ask few individuals’ specificquestions that target to understand them better (Misner 2011, p. 3).
Strategiesto Achieve Efficient Networking
Dubois(2010, p.1) argues that networking is more important thanestablishing a relationship, and may help an investor to outsmart hisor her competitors. Making connections, as well as maintainingcontacts with individuals who are willing to support theirentrepreneurial ideas essential to success. Through building anefficient network of colleagues, entrepreneurs get the assurance thatwhenever they need either a new job or a client to develop theirskills the business network will help. Entrepreneurs should takeadvantage of the access they have and get out of the way to meetintelligent people and build a network of contacts, which will helpthem build the foundation for a healthy relationship.
Duringthe times when emails were the primary business communicationmethods, investors could take a long time to link with tradeassociates. However, the advent of telephones has made it possiblefor entrepreneurs to initiate contact through voice contact.Furthermore, technology has even made it easier for entrepreneurs tobond via social media platforms. Dubois (2010, p. 3) emphasizes thatprovided customers know the name of target people, they can searchtheir names from LinkedIn profiles, Facebook fan pages, or evenTwitter handles. Availability of information has drastically changed,but it does not detract people from the significance of usingold-fashioned offline communication. According to Lou Dubois,networking means building a relationship with one use them.
Importanceof Offline Networking
Althoughonline networks have made it easier for people to make contacts andremain updated on career news, nothing can change the influence offace-to-face networking. Most conspicuous places, where anentrepreneur can network offline, are conferences and networkingevents. Even though many people view meetings as a place to learnmore about new technologies, it is also an excellent networkingopportunity. During networking events or conferences, an entrepreneurcan listen to speakers or attendees and decide who can be the bestprospects. The art of exchanging business cards during conferences ornetworking events is necessary, and an entrepreneur should take asmany as possible. People can share information instantly throughsmartphones during these offline events. With a new application forDroid and iPhone operating systems referred to us Bump Technology,one can bump a phone of another person with calendar events,pictures, or social network connections (Dubois, 2010, p. 4).
PowerfulEntrepreneurs have Strong Connections
Sangeeta(2010, p.1) successful entrepreneurs have robust interpersonalskills, which allow them to create a diversified and robust personalnetwork. Operating a successful organization is a collective effort,which needs interaction with various people such as potentialinvestors, suppliers, employees, customers, competitors, peers, andpublic officials. Industrialists who are committed to buildingconnections use social ties to get critical resources (bothnon-financial and monetary) for his or her business. Entrepreneurs’use networks to get information, exchange ideas, share experiences,draw mutual support, pool expertise, and help in sustainingmotivation, therefore, increasing chances of a venture to succeed orsurvive.
Throughpersonalized interactions, entrepreneurs can accurately perceiveconsumer needs and attitude that help users to generate confidenceand trust in the brand. Entrepreneurs should make sure that theyretain the best customers by creating an emotional bond with them.Commitment to relationship building help entrepreneurs createworkplaces where employees share their ideas and connect at anemotional level. High personal integrity and optimism help inbuilding loyalty and trust with workers thus motivating them toperform their role adequately (Badal 2014, p. 1).
Socialcompetence helps entrepreneurs form equally trusting relationshipswith suppliers. The relations drive both parties to go the extra mileand create long-term relationships. Social competence also helpsentrepreneurs to get information from business networks. Throughnetworks, entrepreneurs exchange ideas, share experiences and makenew connections with individuals inside and outside the industry.Interactions help entrepreneurs discover new markets andtechnologies. The depth and breadth of business networks empowerentrepreneurs to aggressively and confidently take risks, bearfailures, and losses, as well as try something different (Badal 2014,p. 2).
Failuremay be very painful for an entrepreneur, both psychologically andfinancially. However, diverse and stable network is the source ofemotional help, and it builds the confidence of entrepreneur duringthe times of failures and losses. A business network can soften thecost and pain of entrepreneurial loss, and help reduce feelings ofisolation as well as provide inspiration for new business ideas(Badal 2014, p. 3).
Insection, I conducted two interviews with two restaurant entrepreneurswho managed to start and establish their businesses. In my interview,I asked them questions related to business networking aspect such as:
1.What is your background?
2.How did you develop and managed your network?
3.How did you establish your business venture?
4.Did your business network help you to raise capital?
5.What is the important of networking in business lifecycle?
FirstEntrepreneur (Goh Yu Chong)
Chongis the owner and manager of Thai Food Restaurant that has a capacityof 40 people and located at Sodertalje, Stockholm. Thai FoodRestaurant opens from Monday to Saturday and serves foods at lunchhour (as a buffet) and during evening time (as a full course).Besides the in-house services, this restaurant offers take-away andcatering services to customers. Before starting his restaurant, Chonghad experience in connection with restaurant industry because heworked as a waiter in Thailand. However, Chong had an interest instarting his restaurant, and his interest became a reality when avacant house at Sodertalje was put on sale. The price was reasonable,and Chong received financial help from family members to buy thehouse and his business.
Responsesto other questions
Inthe beginning, my contacts with different people help me considerablyin getting the paperwork done mainly because I could not speakSwedish well. For suppliers, my friends help me to find on internet.However, after some time I had to change my suppliers because Iwanted fresh and quality suppliers. The head chef and the kitchenstaff instigated the changes as they could help me to get morequality customers. On the question of how networking helps himestablish his business venture, Chong said that he mainly accessedhis friends’ contacts at the beginning although he still accessesthem now. When I asked Chong about the importance of networking tohis business, the response was I valued networking because itprovides inspiration for new business ideas. In the end, Chong talkedabout how it is easy to develop a business network in Thailand. Chongsaid that Thailand has many social places where people meet and makelong lasting friendship such as schools colleges, university,business conferences, and business activities held by organizations.Therefore, before some get into the market either for job or businessventure, one has a preexisting social network like friends, peers,relatives, and family members. Although the situation in Sweden isright, everything must start from scratch with a little help fromoutsiders. In my experience, the Thai community gave me support andstill provides in my business adventure. I only managed to buildsuccessful business network after doing business for few years andgetting comfortable with language and culture.
Duringthe interview, Shamol informed me that he has been in a restaurantbusiness for seven years. However, he did not give me detailsconcerning his personal life, but he told me that he had worked as achef at an Indian restaurant. After that, he started his restaurantwith his saving and little financial help from friends. Shamol bought(New India) restaurant seven years back from its original owners, andhe has established it. Concerning consulting other people for ideasand advice, Shamol said he has done little consultation by hisintention was fixed and firm.
Responsesto other questions
Afriend helps me to set up my first food menu and to get a chief fromIndia. I contact some of my friends on the weekend while others Imeet them at cultural festivals. My family has little influence ondecisions I make on restaurant matters, and I have managed toseparate family matters and business matters. For instance, peoplewho advise me on family matters are different from those who adviseon business matters. On a development of the network, Shamol saidthat he has established an excellent connection with financialinstitutions at a personal level. In the beginning, it was hard forShamol to establish a relationship with the bank since he had nofinancial security, no reference, and no background. About managingthe network, I often attend unofficial union/association ofrestaurant owners where we sit and discuss different issues however,the union comprises of known persons. We never about new ideas ofdoing restaurant business but we discuss issues that affect ourbusinesses. After I had relocated to Sweden, my business networkchanged, and I started building a new one through work or attendingreligious and cultural events and festivals. Shamol said building abusiness network that is beneficial to your business is hard becauseone must gain loyalty and trust, which require time and someone toovercome language, cultural, and customs difference. He further addedthat maintaining a business network is as complicated as building itbecause a person has to maintain regular connections with people.
Inthis section, findings from the two interviews will be discussed. Inthe discussion, I will show how the two entrepreneurs utilized theirentrepreneurial networks for business and personal reasons.Entrepreneurial networking has increased steadily, and it isextremely prominent in the modern world with the emergence of socialnetwork technologies like instant messaging, email, cyberspacecommunity, as well as social media. The two entrepreneurs Iinterviewed have established restaurant businesses offering Indianand Thai cuisine. Both of them have previously worked in therestaurant industry and possess essential practical knowledgeconcerning this industry. Chong and Shamol have sought and activatedhelp from their current social networks. Both of them are immigrantswho settled in Sweden. Characteristics of the entrepreneurial networkof two entrepreneurs are important, and understanding how networksoperate is important in understanding how to use it for business andpersonal gains. Comparatively the both entrepreneurs were single,therefore they had one primary role set. Since Chong and Shamol havelittle role set, they can give complete concentration to theirbusiness, and, therefore, less conflict of interest experienced. Onecan argue that because of narrow role set, the two entrepreneursmanaged to assign the greatest priority to their restaurant businessand thus capable of investing more effort, time, and dedication. Rolesets affect the entrepreneurial ability and influence the businessphilosophy. For instance, Sushi bar located at Halmstad wherebusiness strategy is to maintain smaller seating procedure and focuson the takeaway, doing so help Sushi to organize her time betweenfamily and business. The entrepreneurs’ role set also determineswhat relationship an entrepreneur will have his or her social ties orcontacts.
Thedensity of an entrepreneurial network of the two entrepreneurs isquite short because the interaction level with their respective ties/contacts is mostly made on a daily basis. The bulk of these contactshave no knowledge of the presence of one another. Suchentrepreneurial networks are suitable for restaurant entrepreneursbecause low-density network means that people have access toinformation. Chong and Shamol signed out business associates,suppliers, and close friends as a most important component of theirentrepreneurial networks. The aspect of reachability of eachentrepreneurial network is very difficult to measure nevertheless,distance is short in case the connection is direct. Distance reduceswhen people are closer to one another. For example, Shamol’s friendassisted him in getting access to the chef in India who apparentlywas necessary for his restaurant. Timing was paramount since anothergroup of entrepreneurs was interested in him, but Shamol managed toconnect with him before others. The network size of every restaurantentrepreneur is somewhat reasonable nevertheless, it is not the sizebut instead it is the structure of the network, which madedifferences between the entrepreneurs. The relationship that everyentrepreneur shares with every tie and outreach of that relation toanother egocentric business network is more effective than having asignificant network. For example, Chong needed assistance withofficial formalities. A friend of Chong had information about thatperson who knew the procedure, and Chong’s friend persuaded thatindividual to help Chong.
Almostdaily, people are somehow involved in a relationship and are aninconsistent contact. People use these relationships for business andpersonal gains. The benefits received from these relationships arereferred to as social capitals or resources, which are available inentrepreneurial networks. These resources have ideas, information,financial capital, business opportunities, and emotional support.Nevertheless, the resources can remain inaccessible or hidden incase, entrepreneurial networks are not well created or properlymanaged. The three articles used in this paper intensely cover thesubject matter and conclude that entrepreneurial networks bringsignificant benefits to entrepreneurs. However, this paper makes itconclusive that utilization and activation of the entrepreneurialnetwork are slightly more in early stages (innovation stages) than inlater stages. It is important to note that the entrepreneurialnetwork is crucial in all stages of business development, and anentrepreneur should not ignore and completely avoid utilizing it inlatter stages. One of the most significant advantages of utilizingthe entrepreneurial network in last stages is that it will helprestaurateurs to expand their clientele, and assist in the furtherexpansion of a network.
Badal,Sangeeta B. 2014. 10- 29. Why Great Entrepreneurs Must Build StrongRelationships. GallupBusiness Journal.Available:http://www.gallup.com/businessjournal/178994/why-great-entrepreneurs-build-strong-relationships.aspx
Dubois,Lou. (2010). 4-6. Howto Network Effectively.Available:http://www.inc.com/guides/2010/08/how-to-network-effectively.html. Last accessed 4/7/2015.
Misner,Ivan. (2011).4-7. ThreeEssentials to Creating a Networking Strategy.Available: http://www.entrepreneur.com/article/ 219429. Lastaccessed 4/7/2015.
Peneder,M. 2009, “The meaning of entrepreneurship: A modular concept.”Journalof Industry, Competition and Trade vol.9no. 2, p. 77-99.