Networking, in the form of direct personal contact and referrals, typically accounts for as much as 70% of an entrepreneur's new business. It's also the #1 way small businesses find employees, suppliers and strategic partners. While this used to be relegated to networking breakfasts, Chamber of Commerce luncheons, cocktail parties and trade shows, a growing number of mainstream businesspeople are doing as the tech industry has done for years and turning to the Internet as an efficient, cost-effective way to build real business through virtual relationships. Here's a four-step process that will help you get the most out of your online networking activities:

1. Get focused. This is the #1 mistake most people make with networking, both face-to-face and online. Even though some of your best results may be unexpected, that doesn't mean that networking is random. You need a system to make sure your activities align with your business objectives or you can spend a lot of time and effort only to produce no results.
2. Get prepared. If your profile for every new networking site you join or personal introduction you make is written from scratch off the top of your head, you're creating extra work for yourself. Have the information you'll need over and over at your fingertips before you start and you'll be far more efficient and consistent.
3. Get engaged. In a few venues, you may get some minimal value from passive participation, but for the most part, you have to be at least moderately active to achieve any real business value.
4. Follow up. Simply meeting new people and adding them to your database doesn't generate new business very effectively. Relationships, not database entries, are where the real value is. Get to know people one-on-one and find out how you can be of service to each other.

Here are a few of the many tools available to help you get started:

Action Steps
The best contacts and resources to help you get it done

Get Focused

Why are you networking online? What activities will support your business objectives?

I recommend: Chapter 2 of The Virtual Handshake: Opening Doors and Closing Deals Online (free download) offers a framework for figuring out your networking needs and aligning your activities with your business objectives.

Get Prepared

Have the text for a basic networking profile ready before you join your first site.

I recommend: A profile is basically a condensed version of your resume/CV, with a short list of your personal interests thrown in. Be sure to build it with your professional image and searchability in mind. If you're comfortable with basic HTML, you should also take the time to make your profile more readable and visually appealing.

Get Engaged

You will eventually find your way to some more niche sites for your industry, profession, background and/or geographical region, but it's best to start with some general business networking sites. It's also a minimal effort to maintain a basic networking profile and participate passively in these sites, even if you later choose to focus your time elsewhere.

I recommend: LinkedIn, Xing, Ecademy and Ryze are all popular general business networking sites with a free basic membership. Also, Facebook is increasingly used for business purposes, and yes, there's even business going on in MySpace. Copy and paste your profile information and get them all knocked out at once.

Follow Up

Manage your contacts from all the various sites in which you participate. Schedule follow-ups and keep a history on each contact.

I recommend: While social networking sites help you manage your contacts within the site, you really want a desktop tool like ACT! or Outlook Business Contact Manager to manage contacts across all your activities.

Take Control of Your Inbox

All this activity will, if done correctly, generate a significant increase in the amount of e-mail you receive. If you don't get it under control, you'll get overwhelmed.

I recommend: I'm a big fan of David Allen's approach in Getting Things Done, which is nicely summarized in this article. For more details and tips, see the Inbox Zero series at 43 Folders. We also cover this in Chapter 14 of The Virtual Handshake.

Consider Blogging

Blogging is a great complement to participating in social networking sites and other communities.

I recommend: About.com offers a good overview of both blogging basics and a Business Weblog Primer.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Remember that networking is not just about lead generation. Don't push for the sale, focus on the relationship. Create value for the other person with every interaction and it will all come back to you (and more) in the long run.
• •  When in Rome, do as the Romans. What's acceptable in one site, list or forum isn't necessarily in another. Get to know the site's culture and feel before jumping in.
• •  Don't say or do anything that you wouldn't say or do in person. Keep in mind that it's a real person you're talking to, and all the standard rules of acceptable behavior apply.
• •  Balance the personal and the professional. You decide where along that spectrum you're comfortable, but not enough personal and you will have a hard time developing friendships - too much and it may damage your professional image.
• •  Do what you say you will do. Every honored commitment, no matter how small, enhances your reputation - every broken one detracts from it. If you can't keep the commitment, don't make it.