Top 5 Referral Sources of a New Entrepreneur

When I began my new entrepreneurial pursuit three years ago there were several referral sources that quickly became the top sources for new business leads.  While some of these referral sources may seem obvious, others were surprising to me. All of these sources continue to generate leads to this day, but the distribution and quality of leads have changed over time.

THEN (Year One: 2010)

1.  Family and Friends
2. Craigslist Prospecting
3. Craigslist Ads
4. Volunteer Activities
5. Thumbtack.com

NOW (Year Three: 2013)

1. Small Business Partnerships
2. Customer Referrals
3.  Internet Ads
4.  Job Lead Sites
5.  Business Website

1. Family and friends

Family and friends may seem like an obvious source of referrals for a new business owner, but many new entrepreneurs overlook this natural source of initial business. When I decided to pursue a full-time career as a tech consultant, I wasn’t shy about letting my family and friends know about my choice. I created a business Facebook and Twitter account and invited family, friends and former colleagues to connect with my business. I also let friends and family know what I was doing through personal Facebook and Linkedin posts. My first clients were friends who needed web pages or help with Internet marketing for their own small businesses.

Lessons Learned: Your friends and family want to support you. Let them know about your business and ways that they can help promote you. But, don’t bombard them with your business information. Over time, reduce the frequency of business-related posts on your personal Facebook page.

2. Craigslist prospecting

Craigslist was familiar to me since I had sold and bought many personal items over the years on eBay as well as Craigslist. I knew there was a part time jobs category in Craigslist so I spent a few minutes each day browsing keywords and categories that fit my new entrepreneurial pursuit. One of the first jobs I landed through Craigslist was with a luxury car dealership, Volvo of Central Virgina, working as a part-time, social media manager. The hourly rate quoted on the Craiglist ad, $10 per hour, was well below the hourly rate I had established for myself, but I decided to send my contact information to see if there was any room for negotiation. I negotiated a slightly higher rate of pay and also requested a chance to negotiate an even higher rate after a few months on the job. This job later became my single most important client.

Lessons Learned: Don’t send a full resume or cover letter to a job prospect on Craigslist right away, even if they request it in the job posting! Send some basic information so they know you read their job ad and also ask them what the name of their business is before sending additional information. Over deliver on your first jobs so that they become your best referral sources.

3. Craigslist ads

Creating a Craigslist ad (in 2013) was a free and simple process so this was one of the first types of advertising I did as a new entrepreneur. [2023 update: Craigslist ads are now $5.00/mo minimum] The first ad that I designed was generated from an html design from my Thumbtack.com profile. Thumbtack later discontinued posting an automated Craigslist advertisement, but I continued to use the format since it began creating a multitude of free leads. Search the Washington DC Area Craigslist ‘creative services’ category (https://washingtondc.craigslist.org/search/crs?query=google%20adwords%20seo#search=1~list~0~0) for “Google Adwords SEO” for an example of what my lead generating ad looks like!

Lessons Learned: Craigslist allows you to ‘renew’ the ad regularly so that it gets repositioned to the top of the job category. Renewing it as often as possible is the key to getting regular leads. Adding a professional photo of yourself and links back to your website is also critical. After three years, in 2016, my Craigslist ad continues to be one of the top 5 sources of new traffic to my website.

4. Volunteer activities

As a new entrepreneur I had plenty of extra time available to work on promoting my new business since I didn’t have many clients. I was eager to develop a portfolio of work and good recommendations. Volunteering was a natural way to achieve both goals. I began to volunteer with non-profit organizations with whom I had natural connections and that were well known and respected in the community. The American Red Cross and the Foster Care Alumni of America provided wonderful recommendations that are posted on my Linkedin profile as well as my business website. These volunteer connections have also led to additional business.

Lessons Learned: Be ready to make a long term commitment to volunteer activities, but don’t over promise the services you are willing and able to provide. Ask for recommendations from key, non-profit staff using Linkedin. Linkedin recommendations are public so they can be reused in resume’s, websites and other promotional material.

5. Thumbtack.com

Thumbtack.com was one of the first paid job lead sites that I used due to its simple business model and professional looking member profiles. Leads are sent to only 5 local businesses to increase the chances that leads can be converted to new clients. Lead fees tend to be high so it is best to ask clarifying questions of the job poster before submitting a bid that will result in a fee for the lead.

Lessons Learned: Pick one or two job lead sites and fully develop your profile and maximize use of the resource. Steady use of a single job lead site can quickly pay off for a new entrepreneur. Good sites for Technology professionals include Thumbtack.com, Elance.com, Odesk.com.

After three years as an entrepreneur all of these referral sources continue to generate business, but the leading source of referrals has changed. The most important source of quality leads is now business partnerships and customer referrals.