Do business membership clubs offer more than just a sense of belonging?
Priya Wadhwa
10X People

Do business membership clubs offer more than just a sense of belonging?

Evaluating the cost of membership vs. value to member

When small companies become bigger, and attract more clients and business deals, it naturally makes it harder for small business to stay afloat. So, at one point in time, it seemed like an ingenious idea for small business owners to band together — almost like a closed business group — for support, advice, references and collaborations. But are they still relevant in our time when social media and co-working spaces make networking with others a piece of cake?

The idea of a membership organisation that would be the perfect place to network, in a time when there were no dedicated places, was an attractive one. Plus, the “I scratch your back, you scratch mine” seemed an easy way to escape the competitive business environment. However, when you look closer, you’ll notice there are reasons why bigger local businesses didn’t join these groups, and why there are no recent runaway success stories for groups that make doing business supposedly easier.

Every company starts as a small business or startup. They need time, resources, good products and services, as well as business acumen, to flourish. Leads at this juncture are undoubtedly of high value to help gain traction. When membership organisations such as BNI or My Micropolis promote themselves as supportive places for small businesses, perhaps where there are no other members in the same business as you, making the generation of leads and deals easier, it is hard to pass the opportunity.

However, such organisations work better for traditional business, such as real estate, household services, auto dealerships and insurance agents. If you have an innovative business or tech idea, this may not be the best way to go about building your business. Luckily, today there are many more places and events to help you grow your network than business membership organisations.

Co-working spaces, seminars, conferences, trade shows, meetup groups, and even workshops are great places to connect with like-minded people, without the unspoken obligation of helping those within the group just because you are part of it.

These alternative places allow fair business practices and healthy competition. You’re more likely to spend quality time with people at these events and build stronger connections. This makes them more confident in you and your services, increasing the chances of them endorsing you to their network. In turn, bagging deals against competition also builds your confidence and business skills.

Another aspect to consider before joining such organisations is to decipher their economic viability. Some of these groups have multiple hidden fees and recurring costs above the membership fees, such as first-time membership service fee, admin fee, occasional fund collection for festivals and celebrations, lead reference commissions, etc. For a new or low-revenue business, this could end up being a costly endeavour.

It’s best to know someone who is or was a member and ask them questions to evaluate whether these organisations could be beneficial to your business — and by how much. While such groups show all the positive potential of joining, one needs to realistically, and perhaps even pessimistically, evaluate the bare minimum potential help one could get from being a member; and then compare that to the price of the membership plus extra fees.

It is also advisable to do your complete research and ask questions to the group committee before signing on. You could even attend a couple of networking events to know what you’re in for, for a nominal charge (usually around AED 100). Learn the type and scale of businesses that are members; evaluate their quality and potential to lend support; understand the benefits they have received and the efforts they had to put in; and ask yourself if there is a better, more cost-effective way to get the same benefits.

Supporting the local business community is a great idea, but you should not need to pay a hefty amount just to be able to do that. One can network and build connections in a number of ways. For the membership fee (usually a few thousand dirhams a year), you could attend multiple seminars, workshops, and events to target your potential clients and build a rapport with them.

It’s also fair to keep in mind that these organisations are for-profit businesses, and as such, act as middlemen that bring people together. Some find this useful. The biggest tech platforms in the world work to bring people together for mutual benefits, such as Facebook, Amazon, Uber, Airbnb (although they do not cost members as much). On the other hand, one of the first management advice given my management consultancies is to remove middlemen services that cost extra dollars to the company.

It’s fair to say that middlemen, be it platforms, people or organisations, have their fair share of advantages and drawbacks. As a business owner, you have a responsibility to your company. While these groups may seem like an easy way to grow your business, every lead and reference, no matter how easy, takes effort and skills. Whether you decide to become a member or not should be a carefully evaluated decision, after knowing all aspects of the agreement, benefits and risks, weighing them against the other networking options.