Starting a New Business through New Relationships

Business is all about relationships. When an entrepreneur starts a new business, his/her most important asset is not cash or a list of potential customer purchased from some data-producing vendor. Nope. The most important asset is his reputation and ability to build relationships. Those relationships can be with customers, partners, vendors and/or referral sources. The more oriented toward advisory/professional services your business is, the more likely it is you’ll need other trusted advisors to be referring to you. The more oriented your business is toward offering services directly customers, the more you’ll be building customer relationships through marketing while working on supplier and vendor relationships.

Nearly all businesses are built on solving problems for others. Whether we offer a product or service, they are nearly always designed to solve a problem that someone else is experiencing. Given this, the question becomes somewhat simple: how do you get your potential customer base to choose your service or product to solve their problem and to part with their money to get their problem solved? What you’re asking them to do is to adopt your service or product and to give you money in exchange for this. The more pain that is required on the part of the customer before they choose your product or service (or one of your competitors), the more trust they will need to have in your persona and product. In other words, you will need a strong brand. Usually, significant felt-pain before the purchase requires significant trust in the one solving their pain. For example, its’ one thing to solve the problem of long hair by being able to cut another’s hair, it’s quite another to solve the problem of a failing business or a heart condition that could kill you. One of the best ways to find customers with high felt-pain is by having someone they trust refer them to you.

Usually, people experiencing high pain turn to trusted advisors in the midst of their pain. Networking with those trusted advisors can help you sell your products or services when your business is focused on reaching those in highly painful situations. Networking is a time intensive effort with a long-term focus. Nearly everyone will take the time to meet with you and grab a cup of coffee. But taking the relationship further – one where you’re not leaching but adding value in multiples for both parties – takes additional time, effort and creativity. Your purpose for building relationships needs to be clear, but cannot be selfish. You build relationships to further your new business, of course. But you can’t have that as your sole focus when building these business relationships. If all you’re asking for is “gimme, gimme, gimme”, then people will understand that and you’ll drink a lot of coffee and not ever receive one referral. You must take the initiative and invest in that relationship before they do. You’ll find that most will not invest in you, so you’ll have to take the first step and invest further in them.

 

For example, everyone understands when you tell them that you’re starting a new business and you’re building out your network. All professionals will get this because they have all done the same thing themselves. But they will likely have established networks with folks they already rely on, so you’re also selling yourself to them as well as to any potential customer. You’ll initiate the relationship through an introductory conversation, but you’ll build that relationship through adding value to the goals and needs of your new contact. So, during the initial meeting, it’s good to ask questions like:

  • Who is your target customer? What are their core characteristics?
  • What is the “sweet spot” for your services?
  • If I could refer someone to you, what problem would they have and how would that customer describe it?
  • What could I do to help build your business?

The last question helps you understand how you might “fit” into their network. Sometimes – especially as a “new kid on the block” – you need to understand what role you’ll play on their team – how do you fit in? What value do you bring to their world? The more you can figure out how to add value to their world and be consistently seen as someone who is referring to them, the more necessary you’ll become to their business, causing them to refer back to you. If they have no ability to refer back to you, then you’ve built a new business relationship with the wrong person.

After you have established the initial relationship, as you meet more people, you’ll start to see connections between your new relationships. If you can’t refer new business to them, you can play the role of “connector” by introducing people to others who can add value to their own business. It’s important that the introduction be given between people who can help each other in roughly equal levels and ways. You’re connection of two other professionals needs to be apparently helpful to both of them as well as being a meeting they will engage in because of their trust in you.

One way to enhance your role of being a connector is to form an informal group of people in your network whom you’ve connected with that meets 2x – 3x/year. This group’s sole purpose is to share new networking contacts that might be helpful to one or more members of your group. It is also a way to stay in contact with those who are in contact with your potential customer base.

Finally, another way to build relationships with your new customer base is through speaking. You’ll need to develop topics that are interesting and are offered for free to groups that your target market frequents. Speaking is a way for potential customers to size you up and get to you know you in a non-threatening way. If you offer real value that they can immediately use, you’re more likely to have them ask you about your services. If your customer base doesn’t have meeting groups built into their ethos, such as those who have just been diagnosed with cancer, then you’ll need to try to speak to groups of those who can refer customers to you, in this case, doctors and nurses.

Building relationships in business can be a full-time job. As your business grows, you’ll have less time to engage in this activity, but you should still make it a priority to have at least one networking breakfast or lunch each week. Businesses that heavily rely on relationships and referrals can slowly die on the vine if they don’t keep networking and building new relationships.

Bill English
Association, The Platinum Group

 

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