3 Ways Professional Organizations Can Benefit Any Startup

Making the decision to jump out of the corporate world and build your own business takes guts. Depending on your source, the attrition rate for start-ups is somewhere between 30 and 95 percent. Access to venture capital is, by many accounts, starting to dry up. Getting a loan from the bank requires proof that you don’t really need the loan in the first place.

It’s a rough and tumble world out there, and the path of an entrepreneur doesn’t come standard with safety nets. But, the good news is that you can make it in business if you’re willing to embrace sacrifice. In my own personal path, I know that the only reason I survived was that I put my fledgling startup before my own needs, on more than one occasion. Sacking out on a friend’s couch, selling my Mercedes and having my wife work a job gave me the time and resources I needed to grow my business into what it is today.

In all the talk of sacrifice and high rates of attrition, there’s one area that isn’t given the attention it deserves. There’s a silver lining to all the doom and gloom: the professional networking opportunities offered by industry organizations. The biggest regret I have is that I didn’t plug into these organizations sooner. I thought I was too small to join in the conventions and be taken seriously. I was wrong, and my ability to recognize this fact saved me countless hours of pounding the pavement and dealing with frustrating, low-quality vendors.

1. Exposure to potential partners.

I’ve seen many entrepreneurs head down two distinct paths: (1) they launch their business and spend all of their time trying to convince people they’re bigger than they really are, or (2) they hide while they try to strengthen themselves behind the scenes, with the hope of one day being strong enough to come out of the shadows and compete with their larger competitors.    

Both of these paths result in missed opportunity. While the first one spins tall tales and tries to bluff his way towards opportunity (creating mistrust and ethical challenges), the other is too scared to get out into the arena. Both businesses suffer -- one based on a lack of trust and the other from a lack of exposure.

Trade groups and professional organizations offer an opportunity to network with people that have already been around the block a few times. They have industry experience, and if you’re a genuine, hard-working person, they’ll try to help where they can. And, as your company scales, you’ll be able to model their leadership styles. I highly recommend embracing a transformational leadership style. According to WiseToast, “Transformational leaders motivate others to do more than they originally intended and often even more than they thought possible.”

Industry partners will help you set more challenging expectations and typically achieve higher performance. They may be competitors, but they’re people too. They’re part of the organization because they want to see the industry grow and thrive; and by virtue of your start-up, whether you feel like it or not, your company is part of the industry.

2. A strong reputation.

The most valuable asset my business has is the reputation we’ve earned for taking care of customers and following through on our promises. That reputation has allowed us to avoid spending money on advertising and other expensive “get attention quick” schemes. Short of creating a compelling website, our best advertisement is the word-of-mouth generated by satisfied customers.

Just last week I learned of a project from a “competitor.” They were swamped and couldn’t handle the customer’s needs. So, they took care of the customer by sub-contracting the assignment to my organization. Even without buying from us, the customer was still putting money in our pocket. It’s a powerful phenomenon that only comes with the connections and track-record that visibility in a professional organization can provide.

3. Protection from legislation.

This point is probably the most important one. Trade unions and industry associations help protect startups (the proverbial “little guy”) from the high-cost of short-sighted government legislation. Lobbyists might have a bad reputation in political circles, but for small business, the access to political capital that they offer can mean the difference between being profitable and filing for bankruptcy.

The best way to access the government, as a start-up, is through an industry organization. Take advantage of the group-rates on services your company needs, and help shape the voice of the organization by participating in its functions. As a result of your input, you can gain a seat at a much bigger table. When a legislator is contacted, action is more likely if there’s a large voting-bloc behind the request.

With more than 63 percent of new jobs created between 1993 and 2013 coming from small business, it’s now more important than ever to protect small business owners from government (local, state and federal) action that could slow down our recovering economy. A real-world example of this would be the E-Cigarette Association. As governments and international tribunals meet to discuss regulation of the emerging e-cig industry, the thousands of small businesses that have sprung up are at risk. Regulation results in increased operating cost; the ECA is designed to help provide the smaller businesses a united voice to help shape government policy in a way that protects both entrepreneurs and consumers.Start-ups must actively pursue memberships in organizations that support their industry. Their active participation helps establish reputations, prevent burdensome government regulation and uncover opportunities for partnership with existing industry members.