Wednesday, 6 May 2009

Do small businesses network enough?

In the current environment where the supply of credit is falling rapidly, it is the small to medium size businesses who are suffering the most. It has never been more important for these businesses to build contacts and promote themselves; as it will be these small and medium sized companies, who provide specialist skills and products coupled with the ability to react quickly, that will play a pivotal role in the recovery of the economy. Treeplex, which is free to join, plans to help professionals and small businesses by providing a platform that enables users to increase their online presence, build relationships and discover new opportunities.

Professional networks are not new; indeed Bloomberg LP has been serving up profile pages and offering communication platforms to members of the financial community since the 1990s, however, the demand for online professional networks has seen a rapid growth in recent years.

Although, professional networks are still often mistaken as being synonymous with social networks, when in fact they are fundamentally different. The majority of users of social networking sites are generally members of only one site, and use that site to keep in touch with existing friends, whereas, users of professional networking sites may be a member of one or more sites and will use those sites to promote their products and services and establish new business relationships.

Figures published by the Department for Business, Enterprise and Regulatory Reform in 2008 reported that of the estimated 4.7 million private enterprises in the UK, 99.3% are small businesses, employing 50 people or less, and that these companies employ 47% of the 22 million people working in the private sector. Many of these companies do not have the marketing budget of larger companies or have their ability to offer end-to-end solutions, and so are turning to professional networks to gain more exposure and establish partnerships with others enabling them to tender for larger projects.

Treeplex co-founder, Philip White, believes “the key to professional networking is about letting people know what you can offer, what your experience is, and who you know. Our main aim at Treeplex is to promote smaller networks of relevant associates, where your associates should be people that you would be happy vouching for or referring work to“. His comments come at a time where the market leader LinkedIn has recently placed a restriction on the size of users’ networks to 30,000 people. Although, this still raises the question: If you are part of an associate’s network with thousands of other people, what is the value of that relationship?

Treeplex plans to generate revenue from a suite of online software tools which are due to be released later in the year and from online advertising. A report published by the Internet Advertising Bureau reported that during the first half of 2008 the internet advertising market had reached a market share of 18.7%, worth £1,682.5 million; an increase of 21% from the previous year.