As legend has it, an importunate young businessman once approached the formidably crusty James Pierpoint Morgan and asked him for a loan of $1 million. ‘Sir, I won’t lend you a cent,’ replied the financier, ‘but I will walk across the floor of the New York Stock Exchange with my arm round your shoulder.’
Such tokens of commercial credibility can be all-important for budding entrepreneurs in a hurry to make their mark in a sceptical world. It was said that, when a past head of the Hongkong and Shanghai Bank outbid an aspirant Chinese merchant in a jade auction and then made a present of the coveted item to him, that gesture alone was enough to set him on a meteoric stock market career.
Not everyone can strike it so lucky, but making and then playing on useful personal connections can be the most important step in achieving recognition on the business stage. As Grant Ellis, chief executive of Harrogate-based local insurance brokers organisation Broker Network, points out, it pays not to leave this to chance.
Punching above your weight
‘We have very deliberate strategy,’ he explains. It involves calculated use of the trade press and networking at appropriate associations and clubs. ‘We know our potential customers — provincial insurance brokers — and we set out to make ourselves available to the trade press.’
Ellis, who for 18 months even had his own column in the Insurance Times, insists that he and his colleagues are never naive enough to talk about their own company, but are always on hand to comment on industry issues, ‘on the side of the smaller broker, and even on issues we don’t know much about’. As a result, he claims, ‘when we go to customers they know us and know what we think.’
Ellis belongs to the Institute of Directors and takes an ‘active interest in trade associations, all of which, he believes, ‘helps us out-punch our weight’ as a fairly small company. Even more helpful, he contends, is membership of TEC, The Executive Club, an American-originated organisation, which holds monthly meetings for its members.
In return for a ‘not inexpensive’ subscription, members are treated to ‘motivational speeches’ by various high achievers and split into groups (organised so that competitors are not put together), which hold ‘executive sessions’, chaired by retired business luminaries, where problems are shared. There are one-to-one sessions, which are ‘like having your own shrink.’
All this can pave the way to deals. ‘One group member in the tiles business had done a good deal with his bank and it happened that we were having a bankers’ beauty parade at the time and so I got him to put us in touch with the same banker, with very satisfactory results’ recalls Ellis.
Meeting the people
As JP Morgan knew, establishing useful personal contacts is more than half the battle for both the would-be and seasoned entrepreneur. Bath-based telecoms buff Crispin Thomas says personal connections forged while working and winning awards in the mobile phone world will be crucial to the success of his latest project.
He is trying to raise up to £10 million privately for tmti, a company providing a card giving ten minutes free telephone advice on how to make your complicated and over-engineered device do what you want it to. If that goes well, he says he hopes to float the company on AIM next year.
Another entrepreneur who has learnt the hard way the difference between using personal contacts and trying to forge ahead without them is Dirk van Dijl, previously with trailer rental group TIP Europe. He recalls how he tried fruitlessly for more than a year to raise money for CityCarClub, a venture offering round the clock shared car use and parking to private and corporate members.
‘Everyone just said “Brilliant idea. Nice to meet you. Have a nice life. Cheerio.”
‘Then I had a Christmas card from a friend who works in an Arab bank. We had lunch, I told him about my problem and he said “you should talk to Nash Fitzwilliams”.’ This is a specialist investment group headed by experienced company fundraiser Duncan Fitzwilliams.
Introductions were made and Nash Fitzwilliams suggested tapping Ofex, the private share market run by ex-AIM chief Simon Brickles. ‘You’ve got a stack of members and should get plenty of publicity and Ofex has now got its act together.’
Van Dijl is now seeking to raise £1.5 million on Ofex for CityCarClub, advised by Nash Fitzwilliams and law firm Irwin Mitchell. There is a further element of networking here, in that, some weeks earlier, Irwin Mitchell had invited Nash Fitzwilliams, among other guests, to a breakfast meeting to discuss the issue of raising finance for smaller companies.
‘These things are critical,’ insists van Dijl. ‘Breakfast meetings, lunch meetings, drinks; meeting people face-to-face is still important even nowadays.
‘We entrepreneurs are looking for money, investors are looking for projects and they all insist on one thing and one thing only: they have to have a good impression of the person doing it.’
Showing your face
This view would be endorsed by Australian entrepreneur Alastair Clayton, who recently brought his mining venture South China Resources to AIM. He says he was greatly encouraged and assisted by fellow resource players John Byrne and his colleagues at another mining group, Cambrian, and ‘a lot of guys who have left the City of London and shifted to the St James’s Street end of town’ in the West End.
‘There is an undercurrent there of younger people who are getting things done,’ he argues. ‘It is like the City itself probably was before the American banks moved in and killed it.’
Clayton is not referring to the traditional ‘gentlemen’s clubs’ in St James’s, such as Boodle’s or White’s (where Duncan Fitzwilliams can sometimes be seen) when he says ‘everyone catches up for a drink in the pub’. He has somewhat different watering holes in mind.
‘It all comes down to meeting people in clubs and pubs,’ maintains Clayton, who the other day clinched his company’s first joint venture in China. He favours the 50 Club in St James’s or, more modestly, the Blue Posts pub on the corner.
He is also one of an entrepreneurial coterie, which finds that Home House in Portman Square, just north of Oxford Street, is a good place to meet. A private club in an elegant building, with good restaurants, bars and a gym, it is a place where you might find yourself rubbing shoulders with colourful characters such as Phil Edmonds, the former Test bowler turned controversial mining entrepreneur, and his forceful colleague Andrew Groves.
Other private clubs in London that entrepreneurs have found useful include the Soho House, where the emphasis tends to be on media people, and the Adam Street Club off the Strand, with a fashionably trendy ambience, which holds regular networking evenings. To see and perhaps be seen by grander business chiefs and financial people, the nearby Savoy Hotel has traditionally been a favoured place, especially if you want to spot senior members of the press, or the Howard Hotel down the hill (sometimes described as the place where people who do not want to be spotted in the Savoy go to be spotted).
Further into the City, the London Capital Club (formerly the Gresham Club, a faded place offering school dinners and port) has carved out something of a niche as a congenial meeting place for the quoted or about to be quoted entrepreneur. At the bar you might as well find a financier from Wall Street as a promoter of infrastructure developments in Kurdistan.
Some take networking to great lengths. Matthew Idiens, former investment banker and now commercial director of resources hopeful VANE, likes a few chukkas of elephant polo in Nepal with hardier members of the financial community.
Angels and clubs
There are, of course, more formal ways of putting yourself on the map as an entrepreneur. Networks of business ‘angels’ exist to connect projects with potential backers and various entrepreneurs’ clubs have grown up in recent years. Greater London Enterprise backs the London Business Angels network, Angel Bourse operates a market for putting potential investors in touch with unquoted companies and their advisers.
Kleinwort Benson Private Bank (part of the German-owned Dresdner Kleinwort Benson group) runs a thriving Entrepreneurs’ Club, whose members can meet informally and also hear insights from a refreshingly wide selection of invited speakers, and Catalyst Investments is involved in another. Such clubs, backed by regional organisations, academic institutions, banks and other commercial groups, have proliferated of late.
These groups have quickly established themselves as a regular feature of business life. But they are still no substitute for a powerful hand on your shoulder.
Making better use of Networking Events
From being a good listener to staying up to date with key events, here are the top 10 ways you can get better at exploiting networking events and occasions.
Preparing, being a good listener and staying up to date with key events are just some of the best ways to build professional relationships. But is there a way to get better at networking?
According to Chris Meredith CEO, of LondonOffices.com, there are 10 sure-fire ways to build contacts through networking, even if it may seem awkward or hard to break into.
“Networking doesn’t come naturally to everyone, and many people often try to avoid it at times. But on a professional level it’s very important for you to do it. You can end up meeting great contacts that you could be useful to you in your career,” he says.
It’s important to understand that networking isn’t about getting as many business cards or handshakes as possible, but about establishing genuine, professional relationships with others.
Meredith recommends making the most of social media and your LinkedIn profile, being positive and refusing to push your own agenda.
“Regardless of whether you are confident or introverted, there’s always things you can do to improve your networking skills and build better relationships,” he says. Here are his top 10 tips to get better at networking.
Always prepare before you go in to avoid awkward silences when in conversation with someone. This will also help you feel more relaxed. If you find yourself in one of these situations, simply ask one of the questions you prepared beforehand.
Be a good listener
It’s important to be engaging when talking to others. Listen to the other persons needs and concerns and (if you can) offer solutions to these. If someone tells you a detail about their family or an interest, take note of it. These small pieces of information come in handy if you ever meet again.
Your attitude and the way you handle yourself always needs to be positive. Smiling and giving off a warm aura will make people want to approach and talk to you when networking.
Make the most of social media
Social media is a great way to network at home. Having a LinkedIn profile is especially important for networking as it can be used post-event as well. Always make sure you keep your profile up to date and take time to connect online with relevant people.
Have quality conversations
Quality is always more important than quantity when networking. Networking isn’t about frantically running around trying to get as many contacts as possible. It’s about building a good working relationship with someone. To get a solid footing, it takes communication and patience.
Don’t push your own agenda
We all want to succeed in this world, but sometimes if you push your own agenda too much, it can seem like a one-way conversation. This can put networkers off having a professional relationship with you. Always make sure you treat other networkers with respect and have a genuine curiosity about who they are.
Stay up to date with key events
It’s important to keep on top of the networking events in your area. Social media is a great way to keep on track with this. Regularly do your research into what’s going on in your area and always take up the chance to do some networking.
Get over shyness
Always introduce yourself with a confident handshake and always make strong eye contact with other individuals. If you’re not sure how to introduce yourself, just keep it simple. A “Hey, how are you, my name’s…” always works.
Have a great business card
Business cards can really help when networking. It’s important to have one that’s memorable to the person receiving it, although make sure its memorable for all the right reasons.
You don’t need to go overboard with the design, but make sure you put some time into thinking about the style and the colours used. It needs to fully represent your company and the logo of your company needs to be clearly visible.
Follow up conversations
It’s always important to follow up with people you have spent time networking with and this doesn’t just mean sending an email through.
If you see on social media is their birthday, wish them well. And if you see something that could match their interests, tag them in the post. The more you keep in touch with them, the better it will be next time you see them.