Business Networking For Stronger Sales
By Charles Hopkins
Published 09/20/2007 | Marketing
Every business depends on networking between employees and other
stakeholders in the company to accomplish the goals of management. To
be effective in a small business, you have to take a look at the way a
corporation builds its network of clients and recruits their employees.
Effective networking practices assure the highest profitability for a
business. This is why human resources is such a high priority in the
corporate world. A corporation draws its strength from its client base
and the reputation it builds by recruiting the best and brightest
If you are a small business owner, you have probably thought of
expanding your business. The way to increase sales is done through
either leveraging capital or human resources. To leverage capital, you
would borrow money and invest it in your means of production. This
might be better equipment, more employees or anything that would
increase your productivity.
Most small businesses choose to leverage human resources. A good
example of this is an affiliate program. The idea behind running an
affiliate program is to offer other companies or individuals a monetary
incentive for acting as agents to sell your products to the public.
Imagine having a small army of affiliates selling your products.
The best part is that you only pay them a commission after they sell
your product. You have no paid salespeople at all. Basically, you just
receive the orders, process the payments and ship the goods to the
This is a good example of effective networking because you have a
built-in loyal workforce once you have hired your affiliates. The
benefits to the merchant are increased sales, market share and product
Another popular form of networking is direct sponsorship in a
Multi-Level Marketing organization. In this type of marketing plan, an
individual sponsors many other people into an organization. Then he
trains this group of people on how to sponsor more people into the
organization themselves. This method results in a very large base of
marketers working to sell products for the company. The original
sponsor gets paid for his efforts by the volume of sales his team
produces. The profit trickles down through the organization based on
the number of people each group leader has sponsored and the sales
volume achieved by each member of the group for the sales period.
Affiliate programs and MLM are not for every company. There are
costs of maintenance, and a payroll to meet every month. The biggest
advantage of using these programs is that a non-employee of the company
makes every sale. This way the company does not have to pay the
worker's benefits and Social Security taxes. Each affiliate or network
marketer is an independent taxable entity. They are not employees of
the company from a legal standpoint.
Business owners must decide for themselves the best way to expand
their business when it comes time to do so. It all comes down to a cost
per sale analysis. Finding the best way to capitalize your business
always includes market research and weighing the benefits of your
If you decide to use one of the methods outlined above, it is best
to discuss this move with a qualified marketing specialist. Also hire a
qualified accountant for taxes and payroll purposes. You may want to
talk to other business people who have successfully made this change
for more information.