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What is a Business Network?

By Donna Reynolds
Updated May 16, 2024
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In today’s business environment, it is important for people to share information and resources in an efficient and cost effective manner. One of the most popular ways that people accomplish this is by using a business network. By definition, this can be any group of small to medium sized businesses with common interests and goals.

Companies within a business network collaborate with one another in order to pool their resources and capitalize on shared assets. Working together, the group members can take on projects that, individually, they might not have been able to manage.

A network is formed because a tangible need exists — members are seeking solutions to specific problems and looking for new opportunities for growth. These groups can be highly structured, holding regular meetings and with a set membership, or more loosely defined. There are virtual networks where members never meet face-to-face, but rather use a shared website and communicate via email and message boards.

There are as many types of business network groups as there are businesses. Groups can consist of companies in the same industry, such as a home builders’ organization or association of regional manufacturers. There are networks that are made up of people in a specific ethnic group. Women in business have found great support and strength by collaborating with other women who share the same focus. A business network can even be a group of small shops or stores in a specific neighborhood.

There are many advantages to joining this type of network. Members can share a customer base and develop new business opportunities. Companies can share suppliers, leveraging strength in numbers for better pricing and stronger vendor commitment. One also offers members shared resources and pools of information.

A business network can also serve as an alliance of like-minded individuals with a common problem. In recent years, they have served as strong lobbying groups, expressing members’ concerns about pending legislation that, if passed, might have a negative effect on the members’ industry. For example, a network in upstate New York organized its members to help stop passage of a bill that would have had a devastating impact on New York’s small businesses.

People who are interested in this concept have two options: join an existing business network or form a new group. To find an existing organization, individuals can contact the local chamber of commerce. This organization is an excellent resource, and should have a listing of all business groups in the area. Individuals might also consider contacting other businesses in a similar industry.

New groups are often formed out of necessity or as the result of a common problem. Many people find it very useful to talk to others in the local community to find out the kinds of problems other businesses in an area or industry are facing. All it takes to form a business network is a common focus and desire to work together for mutual success.

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