We have all heard the classic saying: It’s not what you know, but who you know. It’s true in life, it’s true in business and it’s certainly true in real estate. The people you know and the connections that you make have a profound impact on all aspects of your life. This was something that I discovered fairly early in my business career.
When I started in the financial services industry as a stockbroker I spent the majority of my time dialing for dollars. I spent countless hours calling people I didn’t know in the hope that they might be willing to have a conversation with me, let alone become a client. I was sure, or at least I hoped, that there had to be a better way. I asked successful veterans for tips on building a business and what they had done to achieve the degree of success that they had.
Two answers were constantly thrown back at me: networking and referrals. I was told to join the Chamber of Commerce and other business groups in order to build relationships that would lead to a steady stream of referrals. I was also warned that there is no instant gratification, relationships take time to develop. It is important to remember that it is called net-work-ing because you have to work at it.
The first step in networking is to get out there. Have plenty of business cards and develop a 30-second commercial that clearly explains what you do. You need to develop your listening skills, you have two ears and one mouth – use them in that proportion. It is easy to spot the novices at networking events, they’re the ones running around trying to sell their product or service to anyone with a pulse. They usually go home empty handed.
At this stage you should be focusing on building relationships. Ask people what they do or what they need, then shut up and listen. In his book, The 7 Habits of Highly Effective People, Stephen Covey calls the 5th habit: “Seek first to understand, then to be understood.” If you understand what other people want and help them get it, you will wind up getting what you want as well.
By now you’ve met a bunch of people and collected a lot of business cards. What do you do with them? This is where the real work begins. Many people do all of the stage one activities and stop there. They’ll say that networking is useless or ineffective, for them it is. Many people you meet will be nothing more than contacts, you’ll wind up seeing them at other events but rarely will you go beyond a casual greeting. That’s to be expected and there is nothing wrong with that.
However, you will also meet people that you are truly able to connect with. Perhaps your life objectives are similar or your businesses overlap in some way. These are the relationships that you need to nurture. Grab a cup of coffee or share a meal and get to know this person. Focus more on developing the relationship than on any one transaction. People tend to do business with people that they like.
In stage three you have reached the point where people come to you. When you strive to help other people they will work to return the favor in kind. You become known as someone who is well connected and is a good source of information. This does not happen overnight, but it is well worth the effort.
In real estate you need to clearly define your goals and clarify your message. Go to real estate investment clubs and become known to others. Don’t ignore other groups just because they are not real estate related. If you are looking to buy distressed properties or pre-foreclosures, you can find leads just about anywhere. You may find that you are the only real estate investor in attendance and that certainly gives you an edge.
I have built several businesses over the years using the power of networking. It is an incredible tool when you learn how to use it.
One secret of success in life is for a man to be ready for his opportunity when it comes.