It’s hard to grow your business in a vacuum. Sooner or later, every entrepreneur benefits from collaboration, camaraderie, and support. As such, it’s crucially important to cultivate a robust network of peers, colleagues, and vendors.
There are plenty of strategies you can implement to build out your business network, and one of them may surprise you: Choosing the right legal structure for your business can actually have a massive impact on your ability to network effectively. And for most small businesses, that structure is the Limited Liability Company, or LLC.
This post will go into greater detail about the nature of the LLC, and its benefits for business networking; then, it will provide some additional, strategic tips to ensure a broad, diverse network.
First Things First: What’s an LLC?
There are a number of legal structures you can choose for your small business. When you first start generating revenue based on your business activity, your company will default to Sole Proprietor status. And while there’s certainly nothing wrong with being a Sole Proprietor, you’ll eventually reach a point where it makes sense to choose LLC status.
When you start an LLC, you’re actually creating a whole new business entity. In other words, your LLC will be distinct from its owner, a distinction that doesn’t exist with Sole Proprietorships.
The upshot of this is that your personal assets and liabilities are in a separate category from your business assets and liabilities. So, your personal wealth is effectively shielded from litigation and from aggressive creditors. And there are other benefits, too, including flexibility with regard to how you report your taxable income, wiggle room with respect to how you manage the business, and more.
So, there are plenty of reasons to make your small business an LLC… but what does any of this have to do with networking?
Why LLCs are Great for Business Networking
The networking benefits of the LLC come down to one concept… legitimacy.
Simply put, anyone can become a Sole Proprietor; as soon as you start making money on the basis of self-employment, that’s the default category you’re lumped into.
But LLCs are a little more professional. There are a number of steps you have to go through in order to prove your legitimacy, before you can register your LLC. These steps can vary by state, but might include:
- Filing Articles of Organization and paying your state’s LLC fees.
- Hiring a Registered Agent
- Creating a robust Operating Agreement.
- Obtaining an employer identification number (EIN) from the government.
- Starting your own business bank account.
- Consulting with one of the best LLC formation services in your state.
By completing these steps, you earn a number of unique benefits, such as the ability to accept payments in the name of your business, as opposed to in your own personal name. You also get to list your company as an official LLC with its own Registered Agent.
In short, when you have an LLC, your business has a built-in sheen of respectability and professionalism. It’s clear to everyone that yours is a “real” company, not just a side hustle or a hobby. And as you try to earn the trust of potential business partners, that legitimacy is a huge advantage.
Additional Steps to Build a Business Network
Once you’ve formed your LLC, there are still some strategic steps you can take to develop a strong business network.
Attend Networking Events
Simple. Obvious. Yet surprisingly easy to overlook. Small business owners can get so wrapped up in their day-to-day responsibilities that they don’t leave enough time to attend industry exhibitions, professional conferences, or gatherings of local small business owners. Yet putting yourself out there, making time to share physical space with fellow entrepreneurs, is an essential way to start building your business network.
You’ll often have just as much success meeting people at non-professional events: Think kids’ soccer games, the local pickleball league, the pilates class you enroll in, or the local wine club you sign up for. Don’t hesitate to spend some time relishing your hobbies and the communities built around them, while also keeping eyes and ears open for potential networking opportunities.
Just because you go to networking events or engage in a vigorous social life, that doesn’t guarantee fruitful conversation. To help push past some of the initial conversational awkwardness, it can be helpful to have a few icebreaker questions in your back pocket. Consider some great questions to get to know people:
- What do you do, and what do you love to do?
- What’s your ideal of a perfect Saturday?
- What’s your unpopular food opinion?
Knowing how to break the ice can be invaluable for getting the most out of these initial meetings and conversations, leading to opportunities for building out a broader business network.
Master Your Elevator Pitch
What happens when you actually reach that magical moment when somebody asks you what you do, or invites you to tell them more about your business? Are you ready to close the deal, or at least to clearly and succinctly articulate your value proposition? Make sure you have a basic elevator pitch all ready to go, one that answers the basic questions of:
- Who are your customers?
- What value do you offer/what problems do you solve?
- What makes your brand distinct from the competition?
Have a Strategy to Handle Introversion
Some of us are extroverts, and can easily gab with friends old and new for hours at a time. But if you’re wired to be more of an introvert, and if being in networking events tends to drain your batteries, make sure you have a plan in place to sneak off and recharge for a minute or to. Simply taking a bathroom break or stepping outside for a couple minutes of quiet can dramatically change your entire attitude.
When talking about your professional trajectory, it can sometimes be tempting to vent frustrations with competitors or past employers. There may be a time and a place for that kind of thing, but networking events ain’t it. Generally speaking, people don’t want to work with someone who immediately proves themselves to be a complainer or a grudge-holder, even if the negativity is perfectly justified. Try to keep your energy positive whenever you’re trying to expand your business network!
Don’t Forget to Follow Up
After connecting with someone in person, always take the time to look them up on LinkedIn, maybe even to send a quick message letting them know how much you enjoyed chatting. From there, seek opportunities to reach out and follow up as appropriate, whether that’s extending birthday greetings or letting your connections know about new products/services that could align with their interests. Sending out a digital business card can also be huge!
When somebody asks you for a great web developer, what do you say? Or if someone says they need copywriting assistance, are you ready to offer them a name and an email address? Take note of the vendors who’ve served you well, and don’t hesitate to sing their praises whenever you get the opportunity. Sharing referrals is one of the best ways to shore up your network, and to raise the chances that you’ll get referred yourself.
How Important is Business Networking?
Clearly, there are plenty of ways to expand your business network, but is all this effort really with it?
Time after time, studies confirm that networking is a powerful way to increase your business’ reach and efficacy. Consider just some of the most noteworthy statistics:
- About 85 percent of small business owners indicate that word-of-mouth referrals are the #1 best avenue for bringing in local customers. And then comes customer satisfaction because it hugely increases the chances of a customer returning to do more business. As being said “Higher the customer satisfaction, higher the customer loyalty, advocacy and ultimately the sales.”
- Nearly four out of five entrepreneurs say networking is a crucial aspect of establishing their business success.
- Networking is routinely heralded as one of the top options for building a support system within the business world, and for identifying qualified vendors, partners, and service providers.
The bottom line? It’s worth it to invest your time and energy into growing your professional network. And again, one of the hallmarks of any effective networking strategy is to choose a business structure that conveys professionalism.
Generally speaking, that means the LLC. By registering your small business as an LLC, and by following some of these other guidelines, you can significantly boost your chances of successfully filling out your business network. Take your first steps toward a broader professional community today!