How to Start a Referral Service From Home

If you’re looking for a profitable and rewarding home based business, then starting a referral service is a great option.  I should know.  I’ve been operating my contractor referral business for 22 years!

Referral businesses can be operated part-time or full time from home and they don’t require a lot of start-up capital or overhead.   And, with some careful step-by-step planning, you can be up and running in a matter of weeks:

Step One:  Determine who you want to refer.

Take into consideration what interests you and also what would serve the needs of your community.  For example, if you’re passionate about decorating or home improvements and you see a lot of new homeowners moving into your area, maybe you’d like to start a contractor referral service like mine.  If there a growing number of elderly people in your community, maybe you’d like to start a referral business that helps seniors take care of home-related jobs and errands that may be difficult for them.

Step Two:  Research local laws.

Investigate what the state and county business requirements are for the service providers you’re going to refer.  Do your service providers need to be licensed or insured?  You’ll need that information to screen the providers in your network.

Step Three:  Create a screening process.

Each of the contractors in your network must be properly vetted to ensure the highest level of customer satisfaction.  You’ll need to create a system and ongoing procedures for checking licensing and insurance credentials, customer service, etc.

Step Four:  How will you get paid?

Decide if you want charge the contractors you refer or your clients for your service.  Will you charge a flat monthly fee or will your service be commission-based?  To help determine which compensation model will work best for your business, speak with professionals to get their feedback on what is fair and/or customary in your industry.

Step Five: Identify your market.

Once you’ve assembled a network of providers to refer, research who your potential customers are. Start by creating a market segmentation study that identifies the key characteristics of your prospective customers.  For example, where do your target customers live?  How old are they?

Step Six:  Create a marketing plan.

To promote your business, you’ll need to create a marketing plan. A well-designed website with concise and informative copy is a must.   To help drive traffic to your site and engage our customers, you may want to start a blog or an e-newsletter. Offline promotional campaigns include direct mail, advertising and reaching out to local reporters to generate press attention.  And, networking to build word-of-mouth referrals is another great way to generate buzz about your referral business.

If you’re outgoing, enjoy helping people and think you have what it takes to succeed in the referral service business, don’t hesitate!  With low overhead and substantial financial rewards, a referral service is an ideal home based business.