Referring a Business: The Potential and the Risk

Referring a business to someone in your professional network is a significant responsibility, especially for a small business. Over the past year, I have invested considerable time in building relationships with complementary businesses that I have come to know well and that support both customer and business growth. After all, referrals are among the simplest and fastest ways to help someone solve a problem. At the same time, they are one of the quickest ways to lose trust if things go wrong. That is why I take them very seriously.

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The Snowstorm Referral Test

After a night with 14–18 inches of snowfall, I had a Zoom scheduled with a business owner I met at a networking event. The meeting was set for 10:00 AM and the introduction was a follow up from an event focused entirely on the importance of regional referrals. After catching up on urgent items, I spent about 90 minutes clearing snow and was nearly finished with the driveway which I had cleaned for the second time, but I made sure to stop, change, and be ready a few minutes early for my Zoom meeting. After all, if you are not early, you are late. Five minutes passed, so I sent the standard note that I will wait until 10:10 before dropping off. At 10:10, I left the meeting, refreshed my coffee, changed back, and returned outside.

Ninety minutes later, I received an email apologizing for missing the meeting. The reason was because he was clearing snow, suggesting we reschedule for Thursday. Let’s analyze this. I own a company. You own a company. You were too busy to send a quick courtesy “let’s reschedule” note. I wasted my time, and now you have time on Thursday. Well, lucky me. Analysis complete. How about no? Never. I am no longer interested in discussing your business, will not consider your services (which I am actually looking for), and there is no way I would ever refer you to anyone in my network. A referral is not just a nice gesture, it is a transfer of reputation. Without saying it directly, your actions showed you believe your time is more valuable than mine, which is billable. In my business, professionalism, courtesy, and commitment to service mean everything.

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The Potential: 3 Big Upsides of Referring Someone Great

1) You create real value (fast).

A great referral saves time, removes uncertainty, and speeds up decisions. You are not just “helping” in theory. You are solving an actual problem immediately.

2) You strengthen relationships on both sides.

Good referrals deepen trust in both directions. The person you refer feels supported, and the person you help feels cared for by you. It is one of the rare win-win-win situations in business.

3) You become known as a connector with standards.

Consistently referring strong people builds your reputation as someone who knows good operators, protects others’ time, and has good judgment. Over time, this attracts better opportunities, partners, and clients.

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The Risk: 3 Ways a Bad Referral Can Backfire

1) It damages your credibility (even if it is not “your fault”).

If the referral under delivers, misses deadlines, or acts unprofessionally, then your reputation suffers too. Fair or not, people remember who introduced them.

2) It creates awkwardness and relationship tension.

Bad referrals can create conflicts you never intended. You get pulled into disputes, become the middleman, and feel responsible for fixing things. Suddenly, you are spending social capital you did not mean to and start losing precious time.

3) It makes people hesitate to trust your judgment again.

One bad referral can make someone quietly think, “I will take their recommendations with a grain of salt.” Even if they remain polite, the trust level changes.

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A great referral can create momentum, revenue, and long-term relationships. A bad referral can quietly cost you trust you spent years building. So remember -  refer businesses and individuals in your life and network who will make you look good. If you are not 100% confident they will and have the slightest bit of hesitation, then do not.

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