Let’s be straight from the get-go — growing a business is hard! By now, we’re probably all aware of the data from the Bureau of Labor Statistics that says 50% of businesses will close within five years. When you’re fighting a coin flip’s chance of failure, you’re in a hard line of work!
And the key to any business success comes down to its clients. Regardless of how good your service is, or how good your products are, if you don’t have clients, then your odds of failing increase dramatically.
And that’s the small business rub — growing a client list is without a doubt the most difficult and time-consuming part of any business. Cold calling is a waste of your time and it can take a real toll on your spirit. If you’re just starting out, most likely you don’t have a ton of capital to hire a marketing agency to implement the systems to start dripping you leads.
What you need is a way to make meaningful, relevant connections that facilitate more business. Yes, you may have some business cards and personal acquaintances, but they’ll only take you so far.
Truly, the best way to grow your client list (and business) in a feasible, scalable way is with referrals. In this article, we’ll share the top 3 ways you can start building a referral-based business for more efficient growth.
Top 3 Ways to Build a Referral-Based Business
1) Change your approach to Networking
There’s a negative stigma around networking for a reason. The very word carries a connotation of “tit-for-tat” behavior where you trade favors, but don’t actually add value to each other’s lives.
But networking can offer a lot of value and authentic support. So instead of asking yourself: “What can this person do for me?” ask: “What can I do to help this person?” Think of yourself as a farmer, cultivating a relationship that will continue to provide fruit, rather than a hunter looking for a “quick kill.”
Using this approach facilitates meaningful connections that are infinitely more valuable than a quick business card exchange. Those who you connect with are more emotionally invested in your success and you in theirs, providing a stronger front from which to grow your business.
Think about it — who is more likely to provide a referral for you? The person you just met and immediately asked for an introduction to his or her colleague, or the friend you’ve gotten to know who is more than happy to do you a favor.
2) Expand your knowledge to grow your confidence
When someone is incredibly competent in their specialty, others tend to talk about them. As humans, we love to gossip and talk about other people — especially if they’re great at what they do. You want to talk about them because “they’re the best in the biz,” and you want to refer others to them. After all, your personal recommendations are a direct reflection of yourself and your judgment.
So, to flip that on its head — why not become the kind of person others talk about and want to refer?
If you aren’t, don’t stress. No matter who you are, you can become more capable, knowledgeable, and confident in what you do. (And believe me, confidence goes A LONG WAY!).
Some strategies to help you become more confident is to master basic professional skills like public speaking, communication, leadership, and conflict resolution. Seek out leaders or online courses in your industry to gain sector-specific skills, but don’t be afraid to look beyond that. After all, you don’t know yet what you don’t know, and another business perspective might be able to provide you with further knowledge that will round out your skills and establish you as a leader in your industry.
And with your additional skills and prowess, not only will you be better able to lead your business to success, your confidence and know-how will naturally attract more conversation, more relationships, and more referrals.
3) Join the right networking group
Joining a networking group is one of the best ways to build meaningful connections and referrals, but not all are created equal.
Ideally, networking groups allow you to meet others who can provide you with relevant referrals and potential clients in an ever-growing tree of referrals. But if you choose the wrong one you’ll just be wasting your valuable time and resources.
Ask yourself — is this networking group relevant to my industry and my goals? Do they provide education and support my growth of knowledge? Are they well-established with tried-and-true methods and guidelines? Are they responsive when I reach out?
These are just a few of the questions you should ask yourself as you explore your options. And once you choose one, it doesn’t mean you’re locked in! Check-in with yourself six months later to see how the group is working for you (but don’t just drop it immediately if you don’t get a new client — networking takes time especially if your business requires a commitment/investment from clients). Instead, evaluate the group on whether or not you’re building meaningful connections, expanding your knowledge base, and moving your business forward.
Growing a referral-based business isn’t an overnight task, but meaningful connections and a valuable network can allow you to tap into the benefits much more easily.
Just be sure to do a few things to facilitate your journey — first, focus on being authentic and building meaningful connections with the people you meet. Second, expand your knowledge base, business skills, and confidence, and you will become a magnet to more referrals. Third, join a networking group that supports the above and support your professional goals. A like-minded group of those who are interested in the same outcomes you are will always lead to more effective networking.
If you’re interested in checking out a networking group that provides all of the above, please contact us to learn more! Since 2006, we’ve been achieving our mission to help small member businesses grow and flourish through our unique training and referral system — just imagine what we can do for you.