It's nearly 5:30 p.m. on a balmy tuesday night in Los Angeles, California, but Valencia Roner, president and CEO of VXR Enterprises, isn't headed for home just yet. Fighting traffic along a busy highway, she's on her way to Cigar Night, an event hosted by the City Club on Bunker Hill, a private social organization that promotes networking among professionals. Roner, 37, attends Cigar Night every Tuesday evening she can. It's one of many events hosted by the City Club, which was founded eight years ago and prides itself on the diversity of it's membership. Forget the fact that she -- and nearly everyone else who comes to the event -- doesn't smoke; puffing stogies amongst her peers was never her intent. Roner thought that Cigar Night could be a networking tool she could use to generate more business for her 4-year-old marketing and public relations firm. She thought right. "I've done a lot of social networking through Cigar Night since becoming a member of the City Club last December, and it has led to two businesses that have expressed an interest in our firm providing a service for them," says Roner, whose company maintains clients such as communications corporation The Smiley Group, law firm McClain-Hill Associates, and human resources consulting company Sullivan International. Networking, whether through professional associations, trade shows, or private clubs, has always been a big part of Roner's marketing strategy. But earlier this year when her company's cash flow dipped by 25%, she stepped up her efforts. Roner obtained about 20% of her new clients from fellow members of the Los Angeles chapter of the National Association of Women Business Owners (NAWBO), an organization to which she's belonged since 2000. To date, 80% of Roner's business is generated by referrals. VXR Enterprises, which won an SBA award in May, earned more than $300,000 in revenue last year and has projected some $500,000 in revenue for 2004. The state of small business continues to be challenging, so networking is crucial to being in business. Of course, there are several economists who claim the economy is starting to pick up steam thanks to federal tax rebates, lower federal income-tax rates, increases in military spending, low interest rates, and President Bush's economic stimulus package, which will allow small businesses to write off up to $75,000 worth of equipment purchases as expenses (instead of the previous $25,000). But for many of the 22.9 million small businesses in the United States -- some 820,000 of which are African American-owned -- the rise in unemployment and decrease in consumer spending translates into less revenue for their enterprises. For small black businesses, changes in the economy tend to have an even greater impact. "When the economy offers challenges, many black businesses, in particular, do not fare as well," says Ronald N. Langston, national director of the Minority Business Development Agency (MBDA), "[mainly because they are] unable to adjust to or absorb [extreme economic] challenges, making them particularly vulnerable." To overcome these difficulties, small business owners like Roner are flexing their networking muscle. They are joining local chambers of commerce, obtaining memberships in industry-specific organizations and associations, forming strategic partnerships and alliances with their entrepreneurial peers, and attending trade shows and business conferences such as the annual Black Enterprise/ Microsoft Entrepreneurs Conference held in May in Nashville, Tennessee. But how you go about creating that social interaction is key to landing the contracts, clients, financing opportunities, partnerships, and other things you'll need to maintain and grow your business during lean times. Networking is more than just passing out a bunch of business cards at an arbitrary meet-and-greet function in your neighborhood. It is a step-by-step process to building relationships. In the business world, networking is considered social capital. Spending yours successfully requires a plan, the proper place, advance preparation, and a little bit of patience. Here are the steps you should take to make networking work for you: Determine your objective. Successful networking begins with setting goals for your business. Your objective might be to meet the CEO of a particular company. Maybe it's to increase the ethnic diversity of the companies you would like to do business with. Perhaps it's to pitch your products or services to a select group of buyers in a certain geographic area. Whatever your objective, you must clearly define it before starting the networking process. "A small business person who wants to strengthen their penetration in the marketplace through networking really has to define what they want to accomplish," says Norm Dominguez, United States national director of Business Network International (BNI), a referral-based organization with 58,000 members in 15 countries. "[The small business person has] to ask themselves: 'Do I want to make contact with X number of new people, or establish X number of new clients in a year?'" Determining your objective will not only help you identify why you want to network, it will also help clarify where you should network. You don't want to network among people who have no potential for growing your business. So ask yourself where you are most likely to find your target audience. Do they attend particular performances, recreational facilities, or other events? Are they members of certain business and professional associations or organizations? Choose your location. Once you decide to build your business through networking, your next step is to identify what kinds of organizations, clubs, associations, conferences, and other events or places you think will help you achieve your goals. "We think it's very important for people to establish themselves in what we call hard contact networks and soft contact networks," Dominguez says. "A hard contact network is like BNI, where only one individual per industry classification is allowed in a chapter and they generate referrals for each other. A soft contact network can be a service organization, an association, or a club." There are many places where you can network. Look for organizations and events dedicated to business networking, such as business conferences. Regularly held by large organizations or companies, business conferences can give you access to thousands of entrepreneurs in a variety of industries and provide potential business opportunity. Local chambers of commerce frequently hold smaller gatherings, such as morning coffees or evening meet-and-greets, where you may be able to form relationships. Trade shows provide a tailor-made business environment and face-to-face contact with prospective customers in your industry. Many entrepreneurs join business and professional associations or private clubs to increase their networking power. These options give your company the constant visibility it needs to attract new clients and can also help you with aspects of running your operation. Networking can be done through strategic partnerships as well. Teaming up with businesses that complement what you do and that are a good source of referrals can help you expand your market area and target larger accounts. Roner knows the value of taking on a partner, having formed an alliance with Latino-owned marketing and public relations firm The Sierra Group. Although not a favorite of Roner's, the Internet is another networking option. Through bulletin boards and chat room communities you can cyber-meet potential customers and fellow entrepreneurs. Just keep in mind that when networking, nothing beats good old-fashioned face-to-face encounters. So although you may make initial contact with potential clients in cyberspace, the Internet should not be your sole vehicle for building networking relationships. Of course, no matter which networking venue or option you choose, Roner says don't just sit back and wait for business to come to you. Get involved. "You can join a whole bunch of organizations, but if you're not involved and don't make use of the membership, then it won't pay off like it could," she says. Be prepared to work it. Whether you're attending a wine and cheese at a local organization or a series of workshops at a national business conference, you've got to be prepared. For starters, that means gathering background information about your intended target and preparing effective introductions to give other business professionals. Networking is about building relationships with other business people, and you can't do that unless you're able to create dialogue. So work on your ability to make small talk. Before going to an event, select some topics to serve as icebreakers -- current events, vacation plans, sports, etc. When the conversation turns toward business opportunities, be prepared to describe your company in 60 seconds or less. Dominguez says brevity is important. Some networking experts say entrepreneurs should not focus on finding customers at networking events. Instead, they should look for people to refer. Dominguez, whose organization is predicated on referrals, agrees with this approach but cautions business owners against losing sight of their own goals. Dominguez also recommends carrying plenty of business cards. On the back of the business cards you collect, write down whether the person is a hot referral or a cold referral. Also, write down something you learned about the person to help you recall them and the conversations you had with them when you find the card in your pocket or briefcase two weeks later. Follow up and make a referral. Once you leave the networking event, be prepared to follow up with the contacts you made in the next few days. "So many sales are lost because people don't," says Dominguez. "We get so wrapped up in the excitement of the moment that we don't realize it is only a moment. Follow-up is just one additional element or tool that's going to [help you reach] the goals you want to reach," he says. You can follow up in a variety of ways: a phone call; fax; hand-written note; or hand-signed, typed letter. Roner sends an e-mail or leaves a telephone message. Lastly, using networking to build relationships that lead to new business takes time, so be patient. "Entrepreneurs often have an instant gratification mentality; they think that a referral should happen right away. But networking is not something you just jump into and expect it to provide the kind of business you hear about so many people getting," Dominguez says. "You've got to work it and that takes time. But you also have to never, never, never give up because it will work for you." 10 Steps to Successful Networking Network in places and at events that would attract your target audience. Don't choose venues and occasions where just your good friends hang out. Your friends may not have anything to do with furthering your business goals. Sharpen your networking skills before attending an event. Have a few topics in mind to use as icebreakers. Ask open-ended questions to keep conversation flowing. Set specific goals and stick to them. If your objective is to meet three new people at a local chat-and-chew, make it a point to do that before you leave. Dominguez suggests that you never spend more than 10 minutes with one person when you're networking. If you find yourself spending more time than that, politely introduce that person to someone else, then move on. Describe your business in 60 seconds or less. No one wants to hear you ramble about every aspect of your company. Create a concise and interesting way to let others know what you do. Be willing to listen. Business owners often make the mistake of talking too much when attending a networking event. Ask questions of the person you're talking to and give your undivided attention. Don't glance down at your watch too often or let your eyes wander over their shoulder. Relax. When networking, don't whip out your business card seconds after you shake the person's hand. Create interesting dialogue first. That will begin the relationship-building process. Take notes. Whether you attend a conference, organization meeting, or chamber event, gather information about potential clients and write it on the backs of their business cards. This will help you recall your conversations when it's time to follow up. Look for people to refer. Sometimes the fastest way to get referrals is to give referrals, so pull your entrepreneurial peers into your discussions. Follow up. After the event, don't throw all of the business cards you collected into a drawer. Follow up with a phone call, fax, letter, or e-mail. Or suggest a lunch meeting. Be patient. Obtaining new clients through networking doesn't happen overnight, but it does happen. Stay focused, maintain contact with potential clients, and never give up.