Social media is changing the face of networking for smaller firmsMay 06, 2014
Its latest Quarterly Survey of Small Business in Britain examines recent trends in networking by SMEs, including new ways to interact, key benefits of engaging and reasons why some prefer to remain disconnected.
It found that two thirds of those who say they are involved in formal or informal networks think that the growth of the internet and social media has changed the way they engage with those networks.
51% of larger firms in the £5m+ turnover band are members of at least one business or professional organisation, compared to 30% of those in the smallest turnover band.
Almost a third “mainly” engage with business and professional organisations online and 80% report using a combination of face-to-face and online communication.
Only 12% communicate ‘mainly’ through face-to-face methods such as meetings and social gatherings. Face-to-face communication remains more important for informal networking, with only 14% of these respondents saying they do so ‘mainly online’, while 47% use a combination of face-to-face and online channels.
Report editor Dr Richard Blundel, senior lecturer in Enterprise Development at The Open University, said: “Our research reveals the changing nature of networking among the UK’s small and medium-sized businesses.
“Face-to-face interaction will remain important, particularly in more informal and local networks but online communication has become a core component, helping people to connect in ways that were inconceivable a few years ago.
“I think there also a big question over those who choose to remain isolated. Many of the reasons given sound pretty convincing but occasionally you sense that someone is rationalising a decision to remain isolated, which is actually quite harmful to their business.”
Other key findings on the special topic theme of recent SME networking trends:
- The most commonly identified benefit from being a member of a business or professional organisation is to provide a source of general advice and information. Other benefits include: providing shared experience and social contact (and obtaining more specific advice on technology or best practices;
- Common reasons for not being a member include: insufficient time for networking activity; costs associated with membership; lack of perceived benefits of membership; doubts over the quality of services provided; and personal lack of interest of networking/socializing;
- Sharing experience and social contact are seen as the main benefit of being a member of an informal network of business owners. They are also seen as sources of useful business advice and information and for advice on technology or best practice;
- The reasons why people do not become involved in informal networks revolve around one or more of the following four issues: insufficient time for informal networking activity; lack of perceived benefits of engaging with informal networks; absence of suitable networks in the local area; and a personal lack of interest in networking/socializing;
- The quarterly analysis of several prominent SME research studies and UK macroeconomic data reveals increasing signs of optimism regarding future growth prospects, with improved manufacturing activity and forecasts. All regions are exhibiting signs of growth, with London and the South of England appearing to be leading the recovery.
Dr Blundel said: “Our report also points to a number of practical things that smaller businesses can consider when they are deciding how to make effective use of their networks. For example, if you’ve finally found some breathing space after the recession, it could be time to review your network connections: do they fit with the new landscape and your future ambitions?
“It may be time for a ‘spring clean’, severing a few old ties that are no longer relevant to your business and making some new ones that could support you through the next phase.
“One of the strong lessons from the research is that online technologies are providing an opportunity for new business and networking opportunities for small firms, even if they are relatively small or geographically remote.”
Barclays Business Banking managing director Sue Hayes said: “Digital technology is changing the way in which start-ups and more established businesses bank. The Banking industry has seen huge demand for and use of digital technology.”
A total 472,000 Barclays Business customers regularly use online banking facilities and 147,000 customers are regular users of mobile banking. In addition, we are seeing appetite for online networking sites as a tool to support business development and growth.”
The survey of 1,109 business owners was conducted during January and February this year.