When I left the corporate world to join a small start up I was expecting a bunch of new experiences. One thing I hadn’t anticipated was the degree to which we would turn to and often rely on friends and contacts in our networks. It just didn’t happen in the corporate world. Like many entrepreneurs, we recruited, sought advice from and found suppliers through personal contacts. We generated much of our revenue in the same way.
The upside is that it’s a quick and relatively easy way to open doors. People will usual take a call from someone they know. But handled poorly, it’s also an easy way to lose all your friends. Is it something that businesses could make better use of, or do the inherent risks of mixing business and pleasure make this dangerous territory?
For businesses in some sectors, selling to and buying from friends is the norm. The phrase ‘mates rates’ applies in most practical trades and professions from plumbing to the law. But what about the rest of us?
If you are going to engage your personal contacts, make sure you stay close to them – how annoying is it when ‘friends’ call you only when they need something? ‘Give before you take’ is a decent mantra.
The question you might ask yourself is ‘What do I want?’ Ultimately, this might be ‘sales’ but as in any sales situation, there is a route to the deal, and it’s not always straightforward. Seasoned networkers will tell you the worst way to network is to walk into a room and start selling to everyone there. Same with your personal contacts and friends. They’ll soon start avoiding you if you force financial services or home improvements on them every time they see you. A better way is to acknowledge that the likelihood of them needing what you have to offer is slight, but they in turn will know many people, and it is these people who are more likely to be your customers. Picture yourself in the middle of a series of concentric circles.
The good news is that most people want to help their friends, and so are potential advocates for your business. To get this going, you need to become known for what you do. As one friend advised me: ‘become an expert’. And of course it helps if you have a passion for your work. Simply relating what you do for a living isn’t good enough. You need to make it interesting and succinct. Learn to explain your value in a couple of sentences. You may need to practice your story-telling skills so you can bring your business to life. All the better if it’s with a sense of humour.
Using social media and writing blogs reminds friends and acquaintances of what you are up to (again, keep it interesting and create valuable content) and even a footer on your email signature with a link to your website will encourage the curious to click through and take a look at what you’re up to.
Be clear on how your friends can help you. Much better to ask for introductions than an address book. Make it deliberate so there is clarity on both sides, otherwise it won’t happen.
And if you do end up selling directly to friends? Prices and payment terms should be agreed, and everything should be set out in writing to avoid confusion. Terms should be crystal clear, and you should both know how you plan to handle things if either side isn’t happy. And make sure you talk through some ‘what if’s’. Not much different than selling to anyone else then, is it?
By Andy Coughlin, who works with companies in the UK, US and Middle East, helping them deliver consistently high performance under pressure.