Far too often, small businesses fail within the first five years of opening their doors. While this can be due to a host of bad business practices (and even, to a certain degree, a streak of bad luck), for many companies the problem stems from a lack of building and maintaining a quality backlog of referrals.

If your company is built on a sales strategy that will at some point depend on referrals, you'll need to make sure you don't waste a moment in providing the necessary soil for these referrals to grow into the future of your company's sales. This will include thorough knowledge of how to handle and process these referrals when you are lucky enough to get them. Referrals are not guaranteed sales. Read that sentence again. Referrals are an opportunity. It's up to you to

make the most of that opportunity.

Your first step, of course, will be promoting your company and business to the source of your referrals. If you don't forge a good relationship with the source to begin with, chances are slim they will ever recommend any of their business associates to use you. After all, what's in it for them? We're not talking about affiliate marketing here.

We're talking about a client of yours recommending you to his associates based purely on the thought that you will be able to help them out. The client is putting their own reputation on the line when they make this recommendation. If you haven't proven yourself worthy of such a leap of faith, then you are sunk before the game has even begun.

Beyond simply proving yourself worthy of a referral, you have to be able to install confidence in your source that you can close a deal. This is where you'll be relying on salesmanship. If you don't have it, find someone who does and hire them on the spot. A source will not recommend a client to you if they have a feeling you won't be able to convince them to buy.

This is simple psychology. The source will not want to look like a fool. He wants to help his associates out and point them in the direction of services he believes they'll want to purchase. You may have such a

service, but without proving your sales skills, the source may fear nothing will come of it and he will have wasted some of the good will he's built up with his associates.

Finally, you will actually have to close the deal, and in doing so, set yourself up for further referrals. After a time, your entire business can be free of cold calling and tracking down leads. The business will come to you. But this won't happen by accident. It will take a concerted effort in building a network and satisfying each and every customer to the best of your ability. If you can do that, you'll be set and your business will never have to want for a source of income.