Research from Lloyds TSB Business and the SERTeam at the Open University found that 38 per cent of small firms do not believe that networking can boost their businesses' chances of growth and success. One in ten small firms say they do not devote any time to networking, while 42 per cent only get involved a few times a year. Just 15 per cent said they devoted time to networking every week.

One reason small businesses may be shying away from networking is a belief that there may not be any financial benefits. One in ten (11 per cent) do not think that networking has any impact on their company's turnover, however more than half (56 per cent) do believe there would be some increase in sales if they were more in touch with other potential customers and partners.

Those businesses that do keep up regular contact with others in their industry or locality get good results, with 71 per cent saying they have won new customers over the past year as a direct result and 42 per cent finding new suppliers. Other benefits include finding new marketing or product ideas and staff who are recommended by contacts.

Stephen Pegge, head of communications, Lloyds TSB Business, said: "We've all heard the old adage 'it's who you know not what you know' but for many small firms today, the importance of building relationships is being seriously underestimated. It's clear that small businesses are often too quick to overlook the benefits of networking, but, when they do find the time to nurture new contacts, it's never too long before they realise the part these relationships can play in their future growth and success."

The SERTeam at Cambridge is an independent, non-profit charitable association dedicated to: conducting and publishing entrepreneurship and small business research and improving understanding of key issues. (Living IT February 2007, used with permission)