Social Capital is basically the advantages and perks you get from your social networks. It’s the investment you put in networks that makes you credible before people, that they are willing to entrust ANYTHING to you. Simply, Who you know — and who they know — can be a powerful thing
The number one business rule is “People do business with people they like and trust”. And who likes you more than those in your social networks?
I would even argue that sometimes social capital can be more important than financial capital when starting business. People who know you tend to be your best (and may I say affordable) advertisers. When a friend refers you to their friends, they reduce your marketing costs and save you the energy to try and gain their confidence. I find many people especially us as Africans will tend to offer substandard service especially to friends thinking their friendship will keep them coming…..sorry but if they have to pay, I don’t think they’ll return. Many Kenyan and dare I say African companies operate like hit men, wondering how many people they can trick before their business dies instead of offering the best standards so that people keep coming back and advertising that business to all their friends for free.
Social capital isn’t only for companies and business people but also for individuals, this is what the Germans loosely refer to as “Vitamin B” (Beziehungen). Many people get jobs based on WHO they know and not necessarily WHAT they know.
How to build Social Capital
Show professionalism at ALL times
People believe you before they believe in your business. If you tell a client you will do something, make sure you deliver and when you can’t deliver, ensure you warn the client ahead of time to allow them to find back up. This will build the client’s trust in you, as you have honoured your commitment. Be dependable, deliver products on time, keep your word and treat others with courtesy.
As an employee, be professional and ensure you deliver your tasks on time, this can lead to promotions and incase you decide to leave that company, your boss will be willing to give you a good recommendation letter and in some cases use their networks to find you something when you ask.
Research and Prepare before launching your business
There’s nothing new under the sun. Someone else has done it before you, make sure you set your business apart from the hundreds that have been before you. Listen to potential clients and understand what they are missing from their current provider, offering lower prices might attract people in the beginning but if the quality is terrible, they aren’t coming back.
Research and prepare appropriately before asking someone to refer you to a job, because if you mess up, that person will never refer you to another job ever.
Cultivate business relationships. What kinds of people do you want to meet? Who are the people who can add value to your business and to whose business you can add value? Strike a conversation, get to know them before you start dishing out your cards. People do business with people they like. Get out and meet new people. You’ll meet potential clients as well as learn something new from the people you meet. Those you meet at the event might not necessarily need your services but if you create rapport, they will be referring friends and family to you.
If you’re looking for a job, it’s easier to ask people in an organisation you’re interested in if you had rapport with them at past events.
How to Network:
Before the Event:
Find out, Who do I want to network with? What kind of places do they go?
Before you attend an event you need to know:
What kind of event is it?
Who will be there?
Be strategic, how many people do you want to meet at the event? Set a limit.
Decide, how do you want to be remembered? What kind of image do you want to put across?
At the Event:
Have a 5minute pitch that will pick the other person’s interest. When asked what you do, don’t give a blanket statement like I’m a marketer, accountant etc
Avoid giving false impressions that you can’t live up to. Don’t be too honest either, choose your words wisely. Avoid the words “I’ve just started”, “I only have a small company”…..
After the Event:
Send an email to those you created rapport with at the event. Suggest a meeting time. Avoid including your business profile in the email.