18 – Business Referral Relationships Are Gold

If you aren’t creating and keeping business networking relationships in your business – you are missing out big! Rachel shares how she does this and some legal things to look out for! https://rachelbrenke.com/epi18

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BoxFox

Hey, guys, Rachel Brenke again. I wanted to talk to you a little bit about business networking. I love this topic because I am one of those that truly believes that any actions you can take in your business that give you a great return for relatively low investment of time, money, and energy are the actions that you need to be focusing on. Actually, if you guys have listened to some of my other episodes, you know that I mentioned this three to one rule that I have. Before I make any business decisions, including whether I’m going to engage in business networking with other small business owners or who I’m going to engage with, I am going to use my three to one rule and it works like this.

 

I will sit down and evaluate in a decision three positives to every one negative. If there are enough of positives to outweigh the negatives, sounds like common sense, but we boil it down to these relatively exact numbers, then it’s an action that I’m going to take. When we dig in here in a minute talking about why is business networking good and how to do it, you’re going to see some of the exact things that I evaluate, but I do want you to realize that just because there are three positives to one negative and it looks good on paper doesn’t necessarily mean that it is. If you’re gut is telling you that this is not a good thing, don’t do it. If you don’t have time to commit to it right now, don’t do it. Also, if that negative completely outweighs the three positives, you definitely don’t want to go down that route.

 

This doesn’t mean you never do this action. Circumstances may change, whether for you or the person that you’re going to do business networking with or whatever you’re trying to figure out with this three to one rule, but you don’t have to necessarily say no and close the door on it. In fact, we keep an organizational list in our cloud here, people that have reached out to us or people we’ve reached out to or actions that we’ve wanted to say yes to, but not necessarily the best time right now to do for it, and if we don’t get it onto the calendar, we stick it into this folder in our cloud that is stuff to pull from for the future that I’ll evaluate on a quarterly basis when I am trying to figure out what exactly that I’m going to do when I am checking out my business plan and making sure that I am on task for what I want to be doing and any actions that I’m going to be taking.

 

Side note, if you guys have any questions about business planning, check out episode 13. I talk about business planning in 15 minutes or less. Also, make sure you check out episode 9, Get More Time for Your Business because I share my system that I’ve implemented to manage everything and so it doesn’t feel like that I’m always doing these reevaluations or always making these types of decisions. You’ll see how I segment things out to make sure that it is easier to go along in business and focus on the things that I really thoroughly enjoy because I never enjoy telling someone no or turning down a really good opportunity, but sometimes you just have to or put a pin in it for later, which is why we put it in the cloud.

 

Let’s move on into business networking. Why is business networking good? I’m going to tell you guys right now, business networking is probably one of the top two, if not the most important marketing aspect that I have done in all of my brands, and I have multiple brands if you don’t know. I’ve got Rachel Brenke, which is the business consulting. I have my legal services on the other side, but it doesn’t fall within the purview of these brands. That’s its own firm. Then I also have The Law Tog for Photographers, BlogLegally for online entrepreneurs and bloggers, and then FitLegally for fitness professionals. Pretty much, I’m going to go ahead and say it, the number one thing that has revolutionized those brands to be so successful besides the system that I teach in episode 9, besides the business planning I talk about in episodes 13, in order for any of that to make a difference and to be able to reach people, serve people, and drive my businesses forward is business networking.

 

You guys probably saw where I was going with that one, but it is a low cost way to get in front of somebody else’s audience. Ideally, it is another marketing channel that I have identified because these people have already identified a customer avatar. Assuming that these businesses are doing things properly, which is part of the evaluation you make before you enter into a business networking relationship with somebody, but assuming that they are catering and serving to the avatar that you also have, which side note, if you have no idea what I’m talking about what a client avatar is, check out episode 12, The Magic of a Client Avatar.

 

It will give you all the benefits of why you need to be clear on this, so pause and go over to that one if you need to and then come back because we’re going to keep talking about business networking and why it’s good, but if you’re clear on the client avatar in this business that you are looking at having a relationship with, is very clear on their avatar and they’re catering to them, utilize their business, especially if you are more of a web-based business. Then you definitely need to ensure that you are getting in front of other people who are also on the web. That’s where you’re going to look to, but if maybe you’re carrying more of a virtual abstract type of location, perhaps you’re a creative that works from home, but you actually meet clients and you know there’s physical people in your geographical location, you need to get in with these other brick and mortar locations that are in front of your avatar. They are the marketing channel you need to use, so utilize them.

 

That was low cost. You get a low cost high return if you do it properly, which we’re going to go into. It gets you in front of their avatar, which is also yours. It automatically gives legitimacy to you and credibility, especially if they recognize that other business name. They are basically endorsing you by having this networking relationship, but also, bottom line, you’re not alone then in business. If you are a solopreneur or just an entrepreneur that has maybe a few employees or team members that are helping you and you work from home or in a space by yourself relatively most of the time, it can be very lonely, or you could be on the flip side and you’re someone that is always surrounded by people, but they’re typically worker bees or clients and they’re not necessarily other business owners. You have someone else to talk to, someone else to commiserate with, brainstorm, get to know. That’s why it’s good to do business networking. Not just the money and not just getting the audience, but also because then you’re not alone.

 

How do we want to do this? This is relatively I think straightforward and easy to figure out. I’m going to go ahead and run through it for you guys. You can do it formal, you can do it relatively informal or a hybrid. You have formal referrals, which is you and that business network making the decision, “Okay, we’re going to refer people to one another.” All right? You’re going to put this in writing. You’re going to boil it down into a legal document that hopefully you guys have gotten. Of course, you guys know me. Lawyer. I’ve got that available on RachelBrenke.com, or I can help you find a local attorney to draft that for you, but to memorialize everything in writing so there’s no mismanaged expectations.

 

The downfall to having referrals like this is that if you have a formalized agreement you need to disclose this to any of the people that are being referred. It’s just part of the legal requirement that you guys have for this type of stuff, so we can’t avoid it and it’s deceitful and you can get in trouble if you have a formal referral and then someone finds out that you guys were making money off of one another and didn’t find out about it. If it feels dirty, it probably is dirty, and it is because it’s wrong, so make sure that you disclose it. You don’t have to make a big fanfare about it.

 

My example for this is if you have a wedding planner and a photographer and you guys were referring amongst each other, and the wedding planner says, “Hey, I’m gonna refer you to ABC Photography,” she can just simply throw in there and say, “I’m referring you to ABC Photography. Should you book with them, I do receive X amount commission or a referral fee for this of X, Y, and Z, but here are all the reasons that I do recommend them.” You can couch it in there without it being highlighted.

 

For informal programs, these are the ones that I really strongly recommend. I guess this is also a hybrid, as well. Let me get back to that in a second. For the informal is when someone refers someone to you and you send them a thank you after the fact. They’re not sending someone to you to get that money or get that gift card. For me, I like to do more of an informal like this. I’ll send a gift card of a $25 because that’s the tax limit of what I can deduct, so I’ll send a $25 gift card to one of their favorite businesses or places they like to shop or Starbucks or Target or whatever it is for them, or I like to send a gift.

 

Actually, I received one of these from Amy Northard who’s a CPA for creatives, and I absolutely loved it. It’s called BOXFOX, and you can create a box and they will stylize it and send it off to someone for you to thank them, and that way you don’t have to go to the store, you don’t have to stylize it, you don’t have to buy the packaging. They do it all for you. I think mine had a scarf. It had chocolate. It had body wash stuff. She totally knew me and sent things that I loved. The only thing in there, if she could have fit a maid to help clean my house, that would have been fabulous, but other than that, something like BOXFOX I recommend that you’re able to send off a thank you to someone whenever you’ve done some kind of relationship together.

 

Then there’s this hybrid … I guess these all can be hybrid because really in order for you to establish any of these referrals and so forth and for people to talk about you you have to propose to them marketing materials and so forth to use, whether it’s copy that you’re giving them online, whether it’s a link, such as an affiliate link, or if it’s giving head shots, logos, and those sorts of things, which for me, I have one of these type of networking media kits ready to go in my Dropbox so I can pull the link at any time to give to someone so I don’t have to keep reinventing the wheel each time, and I may tailor it depending on exactly what they’re looking for, but for the most part, all of my brands are broken down and I stay within those buckets, so it’s quite easy.

 

I have one for each of my brands, or maybe it’s physical things that you guys are giving, the business cards, tri-folds, and those things, so that’s why I call it hybrid because I think no matter if you’re doing informal or formal, you’re going to have to give them some sort of materials to be able to talk about you.

 

Yes, there are business networking that people can just refer people to you and then you can informally send a gift later, but for the most part, I would like to provide them as much material so I can manage the message and also so I don’t put a burden. Anybody that I’m reaching out to for business networking, I want them to not only see that it’s going to be mutually beneficial, but I’m going to send people their way, also so they see that I fit with their client avatar, I’m serving the needs of the person that they are reaching out to and attracting into their business, so that is not completely off the wall and their messaging gets diluted, but also so that it makes it easy on them, and I do like either this digital link and/or these physical print-off of materials.

 

Of course, a little bit ago, I said, “If you’re having a formalized agreement, you need to put it in writing and you need to disclose it.” I look at the perspective of I can still do an informal and still give materials because we haven’t come to an actual agreement that this … Say this cupcake bakery that I get a relationship with, I may ask them if they can share my materials for my business, but as long as we don’t get to the point of agreeing, “Hey, I’m gonna send you $25, $50, $125,” whatever it is, each time one of your referrals books, that’s not necessarily a formal referral. I’m taking the steps to give them items to talk about me, but we haven’t gotten to that specific relationship of agreeing verbally or in writing, but we haven’t gotten to that spot of agreeing that she’s going to be compensated for sending people to me, but when you do that, that is when you get moved into the formal referral range.

 

I think I’ve convinced you guys that business networking is relatively important. These business relationships are gold. If you find good ones, you find ones that are within your client avatar, which is why it’s so important that you guys do that research and understanding not just for your message you’re putting out, but so that your business networking relationships can really be beneficial. Sky is the limit. Yes, you’re going to have lemons that come along the line. Things are not going to be always peachy keen. My biggest recommendation of this besides doing all this research to make sure that they’re the right people, but it’s to follow your gut.

 

Don’t just hook your cart to a horse that you think is going to help you and then you feel, “Oh, I know something’s not right here.” Listen to your gut, or if you know that they don’t have a good reputation in the community, don’t go for it because anything you’re connected to is going to fall on you, so you want to try to safeguard your business as much as possible, but they can be good if you do it right, get you in front of your avatar. It’s a low cost way to market because you’re utilizing that marketing channel. You’re not alone. Then you have the options of either doing formal referrals, which unfortunately you have to disclose, or doing the more informal with a gift card or sending a gift like BOXFOX.

 

I’m going to link all of this stuff for you guys in the show notes so if you have any questions about that you can check that out at RachelBrenke.com, and I wish you best of luck. Please do business networking. Identify three to five people that you want to reach out to. Of course, there’s always going to be a primary person that you want to work with, but don’t be afraid to ask other people. Remember, the ultimate rejection is you telling yourself no, not someone else telling you.