Networking offers ‘powerful competitive advantage’ for SMEs – UKTN

Small and medium-sized enterprises (SMEs) led by owners with strong professional networks experience higher growth and profitability, according to new research from American Express.

The Peer Power study, conducted in partnership with The Entrepreneurs Network, highlights a connection between the strength of professional networks and improved commercial performance. 

Based on responses from 500 founders and owners at UK SMEs, the research found that 93% said their professional network had directly led to new business leads in the past year, and 75% regard their professional network as essential to growth. 

SME owners citing robust networks are almost twice as likely to report revenue growth in the past year compared to those with weaker networks. Likewise, 86% of respondents with strong networks said their businesses were profitable last year, compared to 66% among those who stated they had weaker networks. 

Business owners who turn a profit said they tend to rely on their networks more often (63%) than those merely breaking even or operating at a loss (50%), suggesting that staying connected with peers can contribute to success. 

“Our research suggests that networking is more than just a soft skill – it’s a strategic growth lever,” says Ruchi Sharma, vice president, UK commercial at American Express. “SME business owners who spend time in building meaningful connections unlock new opportunities and stronger commercial performance.” 

The study also found that a lack of meaningful connections remains a barrier for many. Nearly six in 10 (58%) wish their network was stronger, 41% of respondents acknowledge not having the right network limits their business’ potential, and almost a third (32%) think they aren’t good at networking. 

“For the past decade, we’ve been bringing entrepreneurs together to share ideas – and what these findings confirm is the growing appetite we see among founders for networking opportunities,” says Philip Salter, founder of The Entrepreneurs Network. 

“As the data shows, getting out there and engaging with other entrepreneurs shouldn’t be seen as an optional extra, but a core necessity if you want to scale a business.”