GROWING YOUR BUSINESS
THE IMPORTANCE OF NETWORKING & PERSONAL RELATIONSHIPS
I thought I would take a break from writing about tax and accounting issues, and use this opportunity to talk about growing your business. Most of us who run small to medium sized businesses are always looking to expand our client base. If you don’t fall into this category, then you can safely stop reading this and return to whatever you were doing.
For those of you who are looking for new clients, I would like to share my experiences about what has worked for me. Although every business (and business owner) is different, from discussions with clients and other businesspeople, I believe these experiences are relevant to the vast majority of service businesses, as well as any business that relies on repeat business from a core group of clients. If you are in the retail sector (either online or bricks & mortar) your client acquisition profile will of course be quite different.
What vs. how
I am not going to spend time discussing the details of “how” to get new clients, but rather I will enumerate several business growth strategies that have been successful for me. For the “how” there are many books, articles, blogs etc. out there about the importance of networking and marketing, and how to improve these skills. What most of them lack is numbers, and being an accountant – I like numbers! My objective is that once armed with this data, you can decide whether it would be beneficial for you to focus on any of these strategies, and then make your own plan as to how you would implement them.
As a bit of background, I purchased my current business from a retiring accountant eight years ago. Since then, I have grown the business at an average rate of 21% per year. The lowest growth year was 8% and the highest growth year was 31%. Personally, I would not have wanted to grow any faster, since this could have negatively impacted client service. I have divided the sources of my new business growth into four categories:
Networking: These are clients that I acquired through formal business networking groups, either directly because they were a member of that group, or indirectly because they were referred by a member of that group.
Referrals: These are clients that were referred to me by anyone other than a member of a networking group that I participate in. The majority are client referrals, but it also includes referrals from vendors and other business people with whom I maintain a relationship.
Personal: These are clients that I acquired either through pre-existing personal relationships, or through other direct contacts in my life outside of business.
Internet: These are clients who found me on the internet primarily through Google searches.
And the numbers are!
- Networking 39%
- Referrals 33%
- Personal 18%
- Internet 10%
Another way of looking at this is that 90% of my business growth has come from interpersonal relationships!
Networking has easily been my most important source of new business, especially when you consider that many of the clients in the Referrals category were referred by clients I acquired through networking. If you are not doing any networking then I urge you to consider giving it a try. Be prepared to be in it for the long haul however – this did not really start paying off for me until well into my second year. A shout out to the networking groups that have helped me achieve this success:
- Connections (Hamilton Chamber of Commerce networking group) www.hamiltonchamber.ca/members/connections/
- East Hamilton Business Network
Please feel free to contact me if you would like any information on either of these groups
Referrals: are my second biggest source of new business. The key here is to provide your existing clients with exceptional customer service, since you won’t get referrals from unhappy clients. This includes clients who may not be “important” clients on their own – some of my best referrals have come from small personal tax clients.
Personal: Don’t forget to let your friends and family know that you are looking for clients, and who exactly your ideal client is! Although not as important a source as the first two, this one comes with the least amount of expense and effort.
Internet: This will be a larger source for many businesses. I have not exploited it to its full potential since I have been satisfied with my current growth rate. Although I won’t get into the details of the myriad of internet marketing strategies, one thing I will mention is to make sure that whatever presence that you have on the internet is up to date and professional looking. A bad internet site is more likely to turn customers away than attract them. Also, I am quite certain that many of the clients I have in the Referrals category looked me up on the internet before giving me a call, and that call would never have happened if my internet presence was not professional.
Happy client hunting!