Mahesh Srinivasan (Mac - as he is more often referred to) serves as one of the Regional Director(s) of BNI (Business Network International) - the largest Referral Based Business Networking organization of its kind. His passion for entrepreneurship and deep commitment to BNI's "Givers Gain" philosophy is what motivated Mac to be one of the pioneers in launching BNI in Bangalore.

A Bachelor in Electronics & Communication degree from India and a Masters in Robotics and Computer Technology in the U.S, Mac began his career as a Control Systems Engineer at Scimed Life Systems, in Minnesota , Today, Mac is a part of the Senior Management team of the SeatonCorp Group of Companies headquartered in Chicago and currently manages their India operations as the Country Head of Seaton India in Bangalore. Here he talks about the similarities and differences between a virtual and a ‘normal' business; and the challenges in managing a virtual one as against the normal.....

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Mahesh started with the Wikiepedia definition of a virtual business: A business which operates without a corresponding physical identity. However portions of a business can be virtualized. 

Whether a business is Real or Virtual, certain principles of all business are the same, such as each business will have Products or Services providing immense "VALUE", Well defined systems & procedures, Scalability, Massive Distribution, they should build Trust, Confidence & Faith with clients.  

Some examples of Virtual businesses are iTunes, an online Portal where music can be bought, today 33% of all music is said to be bought online and Cds are getting outdated. Linkden & Ryze are online business networking sites and nineMotion is another virtual business which connects B2B partners. 

A virtual business sometimes can be more profitable than a Non virtual business, in one of the earlier events of Business gyan called ‘Celebrating Change', Mr. Harish Bijoor referred to a client of his, a grocery business; a medium sized one in Mumbai with presence all over Mumbai, who switched over to the virtual model. All the apartments in the vicinity could place an order on the phone and the goods would be delivered. The business managed to cut down on their overheads and became profitable.

BNI is a group of business owners coming together for the purpose of networking. The members of the chapter become each others' virtual sales team and pass on referrals. It is not Multi Level Marketing. The goal of BNI is to educate each other of the team members' businesses, so if a member spots an opportunity he can connect the prospect with a fellow member. Each chapter consists of at least 30-40 key people, from different businesses, each of the members have to be referred into BNI, before a member is taken into the fold at least 2 of his customer's references are taken. So here the virtualization comes from the fact that your sales team is virtual, fellow business owners and decision makers bring members business from their own contacts.

BNI was founded in 1985 by Ivan Misner, who is regarded as the Father of Modern Networking. There are over 4910 Chapters spanning 37 Countries and over 103,292 members of BNI worldwide. Over 5,000,000 Referrals are passed, BNI tracks the referrals.  

BNI India began in 2004, 8 Chapters |and 240 plus Members, and already Over Rs.12 Crore business has been transacted ($3 Million). The Philosophy of BNI is givers gain and it is word of mouth advertising at its best. 

BNI leverages Networks very effectively. If you were the only one holding a Fax machine, how can it be used, as you can not send a fax to someone else? It can be best explained with Metcalfe's Law which says "The value of a network is proportional to the square of the number of users of the system." (Source: Wikipedia).  

If there are 5 members in a group there can be 10 valuable connections.  

The formula is (n2 - n) / 2  or n*(n - 1) / 2 i.e. (25 - 5) / 2 = 10 

Each person knows at least a thousand people, if there are 30 people in the group each one knows at least 1000 people each. So by participating in a BNI Chapter you in effect have access to 30,000 people as potential customers.

BNI meetings happen regularly, 30 members meet every week between 8 and 9.30 in the morning, and each person is provided with a 60 seconds slot to talk about his business, BNI helps the team members to set goals and helps them achieve them. BNI provides a lot of training to members to become master networkers.

Each one the members keep their eyes and ears open to help a team members business.  

BNI tracks the actual referrals passed between members and also of the value of the transaction. For a reference to be passed, the referee needs to know a business and a requirement which can be serviced by a team member. All members of BNI carry cards of the entire team, and when he sees an opportunity he passes the card to the prospect or arranges for a meeting with the team member. 

BNI works on the simple philosophy that "Givers gain", it has some very simple rules and simple wins. The person who participates gains. Two competing businesses can not be in the same chapter, and members who participate actively are seen to benefit the most from their BNI Membership.

BNI is present in 37 countries and has more than 100,000 members, the reason it is so effective and scales so fast is that, it provides tremendous value to Local businesses, follows a clear and simple philosophy of "Givers Gain" is clearly focused on getting members referrals, and has a tried and tested structure and format which is followed across the world. This makes it easy to scale and replicate.

Q. How does an organisation like BNI scale so fast?

Because of the no of connections, if there are 30 members in each chapter and each of them have 1000 connections, that is the scale to which a business can grow.

Certain businesses where the value of the transaction is very high, lets say you're the dealer of Mercedes Benz, then the references you get over the course of a year may be less, but if it is something as simple as printer cartridge refilling then per meeting you many get 5 references.

He was speaking at a Panel Discussion organized by Businessgyan and Tasmac on the topic ‘Virtual Businesses'. 

Compiled by Ms. Mangal D Karnad for Businessgyan

Issue BG79 Oct07

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