Within 6 to 9 months of becoming certified, if you are not getting 75% of new clients via referrals, you’re doing something wrong.

This is particularly interesting to those in service-based industries. Getting new clients is generally extremely lucrative, and many businesses would be prepared to pay hefty fees to bring in new clients. However, the vast majority of their new clients don’t have any costs associated with them.

Word of mouth is the best way to draw in new business, and there is no reason why any business owner need have any difficulty in this manner. Treat your clients well, and they will, in turn, pass your name along to their associates. Establish trust with people, and they will reciprocate over time.

Additionally, there is no reason not to try to use this method of bringing in new business. You should be treating your clients well, because in service-based industries, that is precisely what you are being paid to do. While this may not be true for every client, treating them well in general will see your clients treat you well – with respect, courtesy, and understanding as you may need it.

For example, I try to be generous with my referrals – but only in terms of whom I will give a referral to. That is, if you ask me if I know someone who can fill a particular role, I would be happy to provide such a recommendation – if I know and trust someone who can fill that role. Getting onto my list of people I refer, however, is much more difficult, as competency and courtesy must be established before I will consider giving the referral.

Over time, this has benefited me, and so most of what I’m doing could be considered selfish. As a result of the dozens of referrals I’ve given out, I have in turn been referred a few times, but every time that has happened, the value of that one referral has shown that it is worth considering others. No, I don’t demand, expect, or even hope for reciprocity every time I give someone a referral. But I know that by doing so, somewhere down the line, a referral will arrive.

I’ve been consulting for several years. As of right now, I have only one client who was not the result of a referral. That’s how service-based businesses work – I provide one client with a service, he mentions my name to his friend, who in turn becomes a client. She mentions me to a colleague, who also becomes a client. I earn each referral (or at least, I try to) by providing that client with the best service I can.

At the end of the day, this is all a matter of trust.

Related posts:

1. Why Bother with Referrals
2. It Pays to Give Away
3. Trust is Earned when Given

Fortunately, that didn’t ruin my business, but in hindsight, I was running a huge risk. There were certainly projects that I should have turned down for a variety of reasons.

What I discovered during the growth of my business is that there are really only a subset of projects that I personally should be getting involved with. For the rest? I have a nice Rolodex with names of businesses that would love to have those projects, and would do a fantastic job at them.

It’s not that I couldn’t do those projects, but rather, that I shouldn’t be doing those projects. While the short-term gains for me I perceived to be significant, in truth, they probably weren’t nearly as important as I thought at the time. What gains I made through those projects I could have made elsewhere, or made irrelevant through other projects I did.

In any business, it can sometimes be difficult to look at the current situation, and the latest opportunity, and determine whether or not the gains from that option are worth pursuing. What can help with this determination, though, is the presence of a clear goal, and you can look at the opportunity from the perspective of how much closer it gets you in reaching those goals.

For example, a project recently arose in which a client required a fairly complex web application to be built. This isn’t my area of specialty, and it’s not where I would take my business. Reflection told me to pass it on to a friend, who’s business does exactly this type of work.

The return benefits are often late in coming (I rarely take a referral fee directly from handing over a project), but can be more significant that what I’ve given. In this particular case, I landed a dream client I would have never met without this friend.

In other words, giving away a project or client now can have bigger returns. I consider it to be an investment in the relationship I have with the client and the company to whom I pass on the client to.

The client is happier because I forwarded them to someone more qualified. They trust me to tell them about my own expertise, because I’ve already proven that I’m not afraid to say that this isn’t what I do best. Forwarding them to others within my network increases the likelihood that if this client ever has a project that does fit my vision of an ideal project, it will be sent my way.

Likewise, the company who is being referred appreciates the business, and when they come across a project that suits my business more than their own, it too will make its way to my desk.

Oddly enough, this exchange is actually measurable in terms of pure profitability. I try to determine with every project that comes my way how the client found me. Once I do that, I can actually balance the project I got against those I gave away.

To date, I’m still on the leading side of this overall. Sure, there are a few relationships weighted in one direction or the other, but the benefits have far out-weighed the costs overall, and that’s why I will continue to pass along on projects that don’t bring me any closer to my goals, because passing those along is bringing me closer to my goals.

Related posts:

1. A Matter of Trust
2. Willing to Say No
3. Business Health Checkup

Many businesses define themselves as being either a product-based business or a service-based business. While there are certainly those businesses which encompass both categories, and certainly many who will primarily think of themselves as providing both of those, it is the thoughts of the customers that matters in how the business is defined.

For example, my lawyer provides me with documents and contracts, but I think of a law firm as being a service-based business. On the other hand, the company that takes care of my lawn would be a product-based business, since what I care about is that I have a nice lawn, that is, a final product.

As a business owner, it is important that you first identify which of these two categories your business belongs to, and, as a consequence, what that means in terms of the growth and development of your business.

Product-based Business

If your business is based on a product, then your concern should be about making that product be as good as it can be in whatever way it is that you choose to market it. If it’s supposed to be high quality, then that’s your focus, it it’s supposed to be cost-effective, then you need to find ways to reduce its cost to the consumer. However, your interactions with customers are limited to finding out how you can make your product better, and the relationship with the consumer is of secondary importance.

To think about this in more practical terms, think about buying cereal at a store. You, as the consumer, generally don’t consider your relationship with the cereal manufacturer to be important, as long as the cereal itself meets your needs. The manufacturer knows this, and therefore will usually focus on the product, and reach out to consumers in order to find out how to improve those products, or create new products to meet a new demand.

Service-based Business

When your business is based on a service, then your concern is two-fold. On the one hand, you need to offer the best service possible, which may involve improving a product. Additionally, you are working directly with clients to make them happy, and as such, you must spend significant amounts of time on networking. That is, when you meet customers, it’s about more than just improving the deliverable, it’s about finding out how you can better meet the needs of that customer.

If my lawyer merely provided me with well-written contracts, I would be happy with the product, but perhaps not with the service. As such, he spends some time to understand what it is I’m trying to accomplish, so that he can anticipate my future needs. However, if the product he delivered wasn’t up to par, then even good service could not keep me with his business.

The problems a business in this situation faces is that they have to deal with all the issues of the product-based business, as well as those of networking and consumer relations. The rewards are appropriate as well, but a business that fails to take this into account is one that is thinking tactically, not strategically – owner beware.

Related posts:

1. Why Not to Compete Based on Price
2. I Hope People Hate My Product
3. An Incomplete Product

Your network is basically a big family, like the mafia families of the stories, in which some things are expected of you from time to time, and in exchange, the family will stand by you when you need their help. That is, a well-cultivated network can be an extension of your family, with people you’ve helped over the years who are glad to help you when you need it, much as you helped them when they needed it.

Cultivating your network means slowly growing your network by always looking to bring people closer to the center of your circles, and increasing the number of people in the outer circles. In the book Make Your Contacts Count which I reviewed following a networking event last year (Getting Started with Networking), the author describes 5 levels of your network, from an acquaintance you barely know to an ally who will stand by your side. Your network will grow by moving people through those circles as effectively as possible.

Growing your network, which I describe in the afore mentioned article, involves more than merely increasing size, but doing so in a manageable way. That is, you can meet many people and make them acquaintances in a relatively short period of time, but also slowly cultivating relationships with a few people from each group, such that the groups grow slowly but surely.

Additionally, maintaining your network will involve work, to constantly connect with the people you already know, to not disappear for long periods of time. In this, websites such as LinkedIn and Facebook provide an excellent service, facilitating regular contact. That is, of course, provided you still maintain the in person contact that you would have used prior to the development and growth of these sites.

Related posts:

1. Are You Magnetized?
2. Mixing Family and Business
3. New Definition of Social

Don’t get me wrong – Facebook is a fantastic site, and it has certainly brought people together who would otherwise have drifted apart. It has created a massive online community with its own culture.

That doesn’t mean it can’t fail.

There were people who, prior to Facebook, would call to say hello, would remember birthdays and send a card or call to say “Happy Birthday”. Now they use the convenience of Facebook to allow those relationships to drift apart. What has happened is that there is now a common middle ground toward which all relationships have migrated.

Those we were drifting apart from now know every event we care to share online, while those we would keep in close touch with before are now slightly further apart. Everyone is pretty much the same in the online world.

Additionally, we have lost our ability to segregate groups of people. The friends I have from school are not necessarily similar to my coworkers, while neither is really part of my family. In real life we isolate the groups from one another, and only allow them to mix under certain circumstances. On Facebook, we have one massive network, most of which does not really care about the other portions of our network.

What can we do about it?

First, we must decide if this actually bothers us, and if so, what approach we wish to take. I prefer to keep my Facebook page active, but I also try to keep my offline social life unchanged. I still call people, or send them personal emails. I don’t assume that a message left on Facebook will reach someone – if I really need to contact them, a minimum of an email, and ideally a phone call is how I continue to handle it.

How about you? What are you doing to maintain your relationships with people? Or have you allowed Facebook to redefine your social life?

Related posts:

1. How I use Facebook
2. Using Social Media the Wrong Way
3. Business and Social Media – Part 4

To me, the casual meetings are as valuable as the formal, professional ones. I prefer to hold meetings that aren’t strictly confidential in coffee shops or over lunch or dinner. If I can’t have the entire conversation casual, I at least aim for a casual setting. This works for me, though I certainly understand why some people find it odd and unsettling.

Perhaps that’s what I’m aiming for.

No, I’m not trying to unsettle people, but I am trying to get to know people better. I want to know the person I’m dealing with, and what they are like outside a professional environment. It’s a chance to learn about their other interests, and sometimes, other sides to their personalities.

For example, having a meeting in a coffee shop dictates that there will be some small talk, whether about finding the location, or the type of drink preferred by each person. Because it’s a more casual environment, discussions will tend to be more casual as well, which has its benefits especially when going through initial meetings, trying to determine needs and expectations.

There’s more to it than that, though, which is the title of this article. Meeting in casual places is one way to develop a true relationship. It’s a way to connect to people beyond the professional ties that brought you together in the first place. If a relationship is strictly professional in nature, than there’s no loyalty in either direction, because each person is truly in the relationship for themselves.

Like marriage, a relationship needs to be about the pair, the combination of people, in order to succeed. Each person has to want the other to benefit from the relationship, and has to care about the other people. As such, it is important to establish relationships that have few borders, that are not limited to certain topics or subjects.

How about you? When you develop relationships with people, do you limit them to professional subjects? Or, like me, do you prefer to cross the various lines and establish a complete relationship with the various people you work with in your day-to-day life?

Related posts:

1. Running Meetings Effectively
2. It Pays to Give Away
3. Meetings… A Necessary Evil?

The stadium was full, with about 46,000 fans in attendance. When Alex came to bat, they all shouted at him. As a Canadian, the level of emotion driving at Alex astounded me – where were the stereotypical pleasant Canadians hiding during these outbursts? Why were the fans so bothered by Alex’s presence on the opposing team? Playing baseball in the Major Leagues is a profession, not a hobby, so why would anyone expect team loyalty from the players?

The more I thought about it, the more I realized this is like developing a product in business, and your customers all shouting at you that they hate the product. In business, this is a good thing – your customers care enough to complain. In fact, if your customers are not complaining, you have to wonder if perhaps you’re connecting to them at all. Silent customers don’t help you improve your product – it’s the one’s who complain that get the new features they want added.

Much like what was happening to Alex Rios. Sure, the fans felt betrayed that he left “their” team. But the reason that they booed so loudly was because they never had wanted him to leave – deep down, they wish he still played for Toronto. (I’m sure there are fans who will disagree with my assessment. If you’re one of them, please answer the question as to why you booed so loudly if you’re happy he left Toronto.)

In my business, I’ve had customers complain, and customers quietly accept whatever I tell them. Honestly speaking, the one’s who complain usually end up with better service – because they tell me what they want or need! If all my customers were vocal in their satisfaction with my work, they would all get better service. But I can only fix what my customers tell me about (okay, that’s a bit extreme, but you get the gist of my point).

Related posts:

1. I Hope People Hate My Product
2. Go Anywhere – Just Go Away
3. Parnasa Fest Toronto 2

There are, in general, two attitudes that can be taken toward trust. The first is that you don’t trust anyone until they’ve earned it. The second is that you trust everyone until they lose it. Which attitude is correct?

There is, of course, the third attitude best expressed in the Italian Job: “I trust everyone. It’s the devil inside them I don’t trust.” It is this attitude that I believe best reflects reality in the workplace.

Ideally, an employer should trust the employees, and vice versa. Employees should trust their boss to tell them what they need to know, and to keep them informed about the environment in which they are working. On the other side, employers should trust their workers to do their jobs, not steal from the employers, and so on.

In reality, we’re dealing with people, and therefore with human nature. Not everyone is trustworthy, but in an environment in which we work together, there must be some level of trust. How you define that level of trust is a personal issue, but it must exist.

In a healthy work environment, people trust one another, but also look out for the bottom line. An employer will trust his employees, but he will also be careful balancing his books to ensure he is not being stolen from. This isn’t an issue in regard to a particular employee, but in regard to all employees as a whole.

Likewise, workers may express trust in their managers to keep them informed, but that doesn’t excuse them from keeping their eyes and ears open about changes that they have not been told about.

The issue of trust should not exist on a personal basis, but on an environment basis. When asked if you trust a particular individual in the workplace, the answer should be yes. (If the answer is no, questions should then be raised regarding why that person is still in the workplace.) When asked if you trust the organization as a whole, however, the answer should be along the lines of as far as I can see them.

Related posts:

1. Full Disclosure
2. Rules of Work
3. Your Word is Binding

This is nothing new, and in truth, I’ve discussed this issue in the past several times. However, last night some parts of my personal schedule slipped, and in hindsight, there was no reason for it.

When relaxation takes priority over responsibility, trouble is in the making.

If you find yourself spending time relaxing when you could be completing a chore, and find this habit repeating, you need to take a step back and evaluate your behavior. When you find yourself spending time that could be spent with family with your nose stuck in a book, or eyes glued to a screen, you need to stop and think about what you’re doing, about what opportunities are being wasted.

Success is more than just making money. Success is when you achieve happiness in your life as a whole (and yes, money might be  a part of that). The best way to be happy is to be around happy people, and to interact with them. If that means that other aspects of your day need to be compromised, then so be it.

The sooner you come to this realization, the sooner you can re-evaluate your days. How much time do you spend doing each of your daily tasks? Is your time being used as effectively as possible? Could you possibly save some time by being better organized?

For this reason, no matter how simple your day is, try to keep an agenda of what you need to do. Include tasks such as spend time with your family, or spend time relaxing by watching TV or reading a book. But try to stick to your schedule, or you may find that it’s those things which are most valuable in the long run which suffer the most in the short term.

Related posts:

1. Time Management and Procrastination
2. Time for Work, Time for Play
3. When You Work for Yourself

It’s been a crazy week, and not just for me, but for many of the people with whom I have contact with on a daily basis. One of the common themes of this week made me think of a saying: Business is business.

Courtesy of T-KONI on Flickr.com

I suppose what that saying is to be interpreted as is that when it comes to business, it’s not about the people involved. What matters is the context and the content – the participants, however, can be swapped around without any implications (okay, maybe not, but you get the point). We’re told not to take such things personally – it’s about business.

In reality, few people can actually deal with business this way. At some level, there is still personality involved – and there needs to be. A motivated and driven person will interact differently than someone complacent. If you compare two such people in similar situations (professional of course) you will see them act differently. The personality of the people involved is what makes and breaks deals.

What this also means is that what is said in a professional environment will ultimately be taken personally. Whether that impacts the context is not relevant – regardless, it has had an effect on the two (or more) people involved and their ability to interact.

For this reason, it is crucial that despite the saying that business is business, one needs to be cognizant of the potential ramifications of the things they say, and how they might be perceived by someone else. This is the reason that we are also told to act like professionals – always be polite (even, or especially, when we don’t want to), always stick to the subject at hand (even if the person did talk about you at the water cooler last week), always give the benefit of the doubt.

Related posts:

1. Business and Social Media – Part 4
2. Business and Social Media – Part 3
3. Slow Economy and Developing a New Business