What does a small business owner need, starting from day one? New business, of course! Whether you sell products or services, your small business can only gain success and stability by capturing and retaining new customers. Step one is gaining new customers. So, how does a small business get new client base?

As you've seen from the various articles posted on michigansmallbiz.com, there are many methods of exposing your potential customers to your business. Direct mail, newspaper advertising, flyering and all the rest are valuable methods. In the short term, these methods are critical to establishing your business quickly. After all, the rent payment and employee paychecks are due, whether you've got people walking through your door or not. Once you have gained the critical first break-even customers, a more refined approach may be necessary. After all, advertising can be expensive; sometimes after the initial newness of your business wears off a saturation point occurs. The return on investment for paid advertising can become minimal. I'm not recommending the stoppage of advertising- it is often the lifeblood of a small business. But another method can and should be added to your business strategy. Oh, and by the way, it's guaranteed to work- given enough time. Now, if it!
doesn't work, can you sue me for liability issues? I don't know, but I guess you can try! Seriously, this method costs NOTHING financially to implement, but it does cost time and requires a change of philosophy.

I believe that the most effective long-term method of gaining clients is the referral method. The referral method DOES have some drawbacks, but first I'd like to discuss what the referral method IS, how it works, what advantages and disadvantages are associated with it.

The referral method is simply word-of-mouth on steroids. The referral method is other people purposefully spreading positive information about your products or services. Have you ever had someone say to you, "Gee, I'd like to go see a movie. Have you seen anything good lately?" Certainly you'd tell this person your opinion about what's good or bad. The referral method is really a mutual commitment that small business owners make with other small business owners and their clients. In his book "Endless Referrals," Bob Burg spells out his definition of networking, which is essential to the referral method. Bob says that networking can be defined this way:

"An arrangement of people crossed at regular intervals by other people, all of whom are cultivating mutually beneficial, give-and-take, win-win relationships with each other."

Now, if you look at "Girard's Law of 250*", which basically states that each of us has a sphere of influence of about 250 people, you can see that Bob's definition above can give us an extended sphere of influence. (*Joe Girard was a VERY successful Chevrolet dealer in Detroit, MI.)

If we associate with, and influence 250 people, and those 250 influence 250, our extended sphere of influence reaches 62500 people. Now, how can we reach all of those people with the message about our products or services? Well, the answer is we can't- not directly anyways.

Can I pause this line of thought for a minute and ask you a question? Really, I'd like to paint a familiar scenario for you. A man is at work. He says, "Man, I am getting older, and I don't feel so good. My doctor has me taking a couple of prescriptions, but they don't seem to be helping." His co-worker just so happens to have just signed up with a multi-level marketing company selling nutritional supplements. His co-worker jumps up and shouts, "Man, I've got just the product for you! In fact, I'll go out to my car and get the forms to sign up for the products and the business!"

Some of you can relate to this situation. If you were the person that was not feeling too good, how would you feel now? Probably wishing that you hadn't mentioned how you feel! The sick man probably feels some pressure from his co-worker, even if his co-worker didn't mean for it to feel that way. The man with the health products has a vested interest in the products- he may not have a vested interest in his friend's health. He wants to make a sale, and they both know it.

A man is at work. He says, "Man, I am getting older, and I don't feel so good. My doctor has me taking a couple of prescriptions, but they don't seem to be helping."

His co-worker just so happens to have starting taking nutritional supplements that a friend-of-a-friend sold to him. He likes the products, feels that they've improved his health, and decides to tell his co-worker.

"Oh yeah? I've been taking brand X for about a month. I started feeling better right away, but I thought it was all in my head. When my knee stopped hurting last week, I figured it must be working."

"Can you get me some?"

"I guess so. I think I've got his card in my wallet. You can call him yourself if you want."

Obivously, this is old-fashioned word-of-mouth advertising. I love word-of-mouth! I get a substantial amount of business from this type of referral. The only problem with it is this: I have no control over the prospect's information. If they never call me, I don't even know if someone referred them to me. My card my sit on a shelf and turn to dust before they remember that my products may help them.

A man is at work. He says, "Man, I am getting older, and I don't feel so good. My doctor has me taking a couple of prescriptions, but they don't seem to be helping."

The man says, "I'm not really sure. I told the doctor that I had heartburn. He gave me a prescription for that. I told him that I'm having trouble sleeping. He gave me a prescription for that. He took some blood samples, then he gave me another prescription for high blood pressure and high cholesterol."

His co-worker says, "Wow. All that, and you don't feel any better?"

"Nope."

The co-worker says, "Well, I was having some similar problems- the cholesterol and blood pressure issues. You know, I had gained a lot of weight, too- stress related, I'm sure. Then I met John Doe. He is a friend of my buddy Jerry, the one that I play racquetball with. I was telling Jerry about all of my problems, then he asked me if John Doe could call me. John Doe isn't a doctor, he's not really a medical guy at all. He's a vitamin salesman! Jerry told me he's not one of those high-pressure-buy-my-herbs kind of guys. If I let him call me, he'd give me good information, I wouldn't have to make any kind of decision, it was just good information. I asked Jerry if the stuff was any good. Jerry said that he was using it, and he REALLY liked it. So, I decided to try it. This John Doe guy and I have become pretty good friends, and I trust him."

"Are you selling this stuff, or getting kick-backs or what? You sound like an info-mercial for this guy."

"No, but I'll tell you something. John Doe asked me what I do for a living. I told him that I work in an office supply store. He asked me if I get any kind of commissions for selling stuff in our store. I told him that yes I do. He took a stack of my cards, and has been handing them out all over town!"

"Yeah, I hardly even know the guy, and here he's been out telling everybody about this store and my service!"

"Yeah, I'll give you his card. But he prefers to call people- you know how it is. A lot of people say they're gonna call, but don't. Can I give him your number?"

"Like I said, he sells vitamins and all of that, but he's not pushy. He knows his stuff, and he's really honest. Plus, maybe he'll start passing your card out, too!"

"Here's his card. Make sure he knows that it was me that recommended him. I want him to know that I'm trying to pay back his favors. I need more salespeople like him selling me to other people. I don't pay him anything, and I keep getting all of this easy business!"

Can you see what happened here? John Doe could have tried to stuff his products down everyone's throat, and made himself a pushy salesman. Instead, other people are selling his products for him? Why? Because he understands this fundamental principle- "Whatever a man sows, this he will also reap." (Galatians 6:7, The Holy Bible)

You see, the idea is simple- if you desire good feeling, respect, positive rapport, and business success, it will never harm you to assist others in attaining these same goals. If you foster good will towards others, you will recieve good will in return. Does this work in every case? Of course not. Some will view you with suspicion, others will take your referrals and never give any back to you. Adopt the philosophy of giving with no expectancy of reward, and you will recieve pleasant surprises. Think about it- does it really take much extra effort to promote someone else's (reputable) business? Many times I find it easier to promote someone else's business over mine! If someone rejects the other business that I'm promoting, I don't take personal offense or feel loss. If they reject what my business offers, sometimes I find that unbearable!

I'd like to give you 11 questions. These questions come once again from Bob Burg's "Endless Referrals." This book is truly an investment for all small business owners. It's worth its price for these questions alone.

How did you get your start in the widget business?
What do you enjoy most about your profession?
What separates you and your company from the competition?
What advice would you give someone just starting in the widget business?
What one thing would you do with your business if you knew that you could not fail?
What significant changes have you seen take place in your profession through the years?
What do you see as the coming trends in the widget business?
Describe the strangest or funniest incident you’ve experienced in your business.
What ways have you found to be the most effective for promoting your business?
What one sentence would you like people to use in describing the way that you do business?
And possibly the most important question -- How can I know if someone I’m talking to is a good prospect for you?

It isn't necessary to ask all of these questions every time that you talk to someone about their business. What's important is to understand who they are, what they do, and to let them know that you are interested in them. When asking these questions, it's important to be focused on THEIR business, and how you can assist them. Over time, they will naturally want to help you- they will want to pay you back for all that you've done for them.

This method is proven to work, time and time again. Adopting the belief that it works, and making it a part of your daily routine may take some effort, but once you've shifted your focus, you WILL like the results.

Oh, I've mentioned all of the positives, and haven't mentioned any of the negatives about this method. There is only one drawback to this method that I am aware of- it takes time. You can't expect to start implementing this today, and get results tomorrow. But you can expect this method to affect your bottom line of you use it consistently.

I'd like to hear how this works for you. Feel free to email me at jcrshelton@hotmail.com with questions or comments

Charlie Shelton is an independent distributor of nutritional products, meal replacement products and skin care products. Charlie was a heavy equipment operator at a Michigan landfill (yes, a garbage dump!) for 7 ½ years. During that time he was able to start his part-time business and transition it to full-time distribution. He is the husband of Josette (R.N.) and proud father of three children. To learn more about his business and products, click here.