Houston Business Spotlight Concepts
Organised and paid for business networking can be an expensive activity if you don’t monitor your financial position closely. To do this correctly you should factor in all the networking costs involved and measure these against all the networking derived returns generated. For more details click Houston Business Spotlight.
All the recording and analysis of such financial data may seem tedious but knowing exactly what is happening with your cash flow is vital to any business.
Main Costs: These include such obvious items as the business networking group subscription fee and the per-meeting costs as well as any additional charges for food and drinks.
Hidden Costs: These costs are not always obvious and are sometimes overlooked. Some can appear trifling but can accumulate and must therefore be counted. The major hidden cost is lost opportunity. When you are networking you are not making any money directly for your business by selling, manufacturing, developing new products, creating designs, designing courses, etc… The argument against this statement would be that you are investing in building relationships but, until these generate income either by direct work with a contact or by referral, they do not yield actual profits at the time. What is your hourly rate? Include travel time. You should include such things as fuel for the car or public transport costs to the venue and any parking charges. You should also include the costs of any of your promotional material given out at the various events and any other applicable additional costs you can identify.
Profits generated: The basic method I use is accurate enough to determine if networking costs are exceeded by networking returns. Only use the profit returned on business generated by dealings with your business networking group derived contacts or referrals supplied by them. I use only received income but you can use whatever base line you are happy with. This is only to be used a rough guide after all.
Financial position: This is simply the money in minus the money out at any convenient point in time. If it is negative then networking is costing you money. Obviously there has to be subjective analysis of the result. If you have only been networking for a short while, you would likely expect poor results until momentum builds. Monitor things regularly and check that the numbers are moving the right way. If you get big negatives, even though you have been networking for a good while, then I suggest you may need to re-evaluate your networking activity. You may need to work on your actual networking techniques. You may also be in the wrong group or groups and may need to find out where your target audience networks and go there instead. Your business may benefit much more from other forms of marketing and you may need to seek professional independent advice on how best to redistribute your efforts.
In conclusion, knowing exactly what is happening with your cash flow is vital to any business. We monitor most costs in business so why should networking costs be any different? This can be ascertained by simply calculating networking generated profits minus all the money paid out for networking at any convenient point in time. If it is negative for too long then networking is costing you money and you may need to find out why.