BUSINESS NETWORKING, Part 1: Joint Ventures
By: Alan Carson – Carson, Dunlop & Associates Ltd.
The idea of business networking and the business meeting group has spread across North America. Designed to foster business relationships and referral business, these groups are comprised of a variety of professionals who get together to share information. Groups may differ slightly from each other but they have the following common themes:
• Each meeting group typically has only one professional from each area of business.
For example, there will be one real estate lawyer, one real estate agent, one bank manager, one dentist, one home inspector, and so on.
• The group meets weekly or monthly to share business ideas and strategies.
• The group members refer business to each other.
Build Network of Referral Sources
The idea behind this networking and referral group is that once you establish and grow the network, you will have a steady flow of referral business. All of the people in your group will be familiar with your service. They are expected to keep you in mind any time they have an opportunity to pass on the name of a home inspector to someone, whether it is a person buying a home or someone else who could refer business to you on an ongoing basis. In return, you are expected to do the same.
If there is no such organization in your city, or if the organization exists but it already has a home inspector, you could easily start your own group. These days, there are plenty of social networking tools that can make starting or participating in business networking groups very easy. One example is meetup.com, which has facilitated hundreds of groups in a given city to meet in person for a specific interest using its website and mobile application.
Joint ventures and strategic alliances make sense in many businesses. Let’s look at each to see how they can help grow your business. Right now, we will introduce joint ventures and will discuss strategic alliances in Part[ 2.
A joint venture is a strategy or plan you undertake with the help of, or in partnership with, another company in a related, but not competing, business. The sole proprietor home inspector tends to be insular in his or her thinking. It’s better to open your mind to how others can help you, and how you, in turn, can help them. This is a leap worth taking.
Ways to Work with Others
The thinking goes like this: First identify everything you do. Then identify all the other professionals and service providers with whom you come in contact in any way. Write this information down and rearrange your contacts into a pecking order. In other words, consider which professionals and service providers rely on whom and at what time? Then identify which of these people or companies are at the same level or below you. Those at the highest level may refer business to others. Those at the lowest levels may receive referrals. Those in the middle may provide and receive referrals. Think of how they can help you, or how you can work together.
Here is an example. Let’s say you identify the real estate lawyer as being at the same level as you. You might design a joint venture to target previous clients of his or hers. You tell the lawyer that you will pay for the costs of mailing a letter to each of his or her past clients who have purchased a new home in the past six months. The mailer advertises two services:
1. You advertise your inspection prior to the expiration of the new-home warranty.
2. The lawyer can advertise a special on wills. Most real estate lawyers also write wills as a secondary specialty.
You get your contacts; the lawyer gets a free mailer. Everyone is happy.
Why did we say that you should only contact people or companies at the same level or lower? If you contact someone higher, you become the hunted rather than the hunter. To a real estate agent, you are lower on the food chain. The agent might use you to cover the costs of some of his or her advertising. Here is a common scenario:
An agent asks you to pay for an ad on the back of his or her business card, to pay for a link to his or her Web site, or to pay for putting your logo at a corner of their weekly ad in the newspaper. They know that they can tap you, a few other home inspectors, bankers, and lawyers. The agent ends up getting his or her ads, business cards, and Web sites for free. If that agent refers a significant amount of business to you, however, it is very hard to say, “No!”
If you can think of people at a lower level than you on the food chain (moving companies, locksmiths, carpet cleaners, alarm companies, landscapers, painters, etc.), you can ask them to pay to put their logo at the corner of your business card, report, or Web site. Be careful of professional association ethics rules. You do not want to cross any lines here.
We have briefly introduced the topic of business alliances and joint ventures. In our next article, we will discuss strategic alliances. Specifically, when you involve two or more companies that are highly compatible it benefits all companies involved.