Who can you trust in small business?

Article by Jane Tweedy, Business Advisor, Western Sydney Business Centre

This week I’ve taken a different tact with more of a thought piece on referrals and who you can trust in small business. Not so much advice this time, as it is sharing my recent frustration over referrals. This issue has been playing on my mind now for the last month or so, after personal and client issues with people they (and I) thought they could trust and had been referred.



Who were they recommended by?

I personally have had some recent bad experiences with service providers who were recommended or introduced by people I know in business circles. I’ve also heard a number of stories of people that have used highly recommended and respected providers, even people that I have also suggested, to have a poor experience with substandard work. A more obvious red flag is taking the recommendation from someone you already don’t trust or respect! The combination is making me question every referral, and is making me reluctant to refer anyone. The trouble is that as part of the Business ‘Connect’ role we need to give three ‘merit’ based referrals. That in itself can be impractical!


Being a finalist in the Strategic Connector category of the Altitude Awards two years running, suggests I’m pretty good at referring and connecting people, and that’s part of the issue. I place a lot of weight on the quality of my referrals. I never want to refer someone, and have anyone have an issue with them. We all have times when we do things that are out a character, unexpected things happen or whatever, but recently it’s just been so many things happening across the board!

As an example, I got involved in a compilation book project on referral. Before joining, I spoke to the Australian organiser and had no issues with her, though it turned out she inadvertently misrepresented the other person involved. She was relying on what she thought was the Editor’s reputation, but was more likely the Editor talking herself up, along with a couple of raving fans. Once I joined the group with the project leader, it’s been a shocking experience! I would never have signed up knowing how appallingly unprofessional, and how massive a self-obsessed drama queen she is.

A client had a costly experience with a bookkeeper. We all know there are two sides to every story, however in this case regardless, some of the mistakes made are completely inexcusable. It has cost the client in unrecoverable overpaid GST, as well as having to redo all her books for the 18 months the bookkeeper had them. This is costing massive amounts of rework incurring dollar cost, and precious time she can little afford.


‘Highly recommended’ referrals

Those of us that know the referral networking group circuit, can often see a referral group referral a mile away. However many people are oblivious to these. The trouble with these referrals is that you may have built a ‘know, like and even trust’ relationship with the provider, but until you’ve used their service you cannot comment on the quality of their service. I’ve seen many poor ‘highly recommended’ referrals. Suggest your connections, but don’t imply you’ve had a great actual experience with their service if you haven’t used it.


Ways to mitigate the risk

Always conduct your due diligence, even when using a friend, or a friend’s referral. There’s a fence being completely replaced at the moment due to our neighbour using a friend’s connection who did shoddy work with low quality materials. It must be costing a fortune in labour (it’s massive as it’s semi-rural!)

Reality is, there are some things you simply won’t know until you actually sign-up, pay the money and use the service. You may know, like and trust the person and ask the right questions, but it won’t guarantee a bad experience is avoided. Avoid long term lock-ins when you don’t know what you’ll be getting.


Giving and receiving referrals

What are your thoughts? How do you find referrals?

Do you care if you give a bad referral? Does it weigh on you as it does for me? When giving referrals, make sure you ask for feedback. You’ll need to make the call how you handle any issues, and it may depend on the relationship you have with the service provider. Also make sure to disclose any conflicts of interest or kickbacks.

Lost trust

When a number of these issues happen at once, it’s really hard not to lose trust in people. Hence I’m not really offering solutions, more sharing my issues, and maybe others have solutions for how to repair lost trust. Maybe you’d like to share what works for you?

Business Connect

Although we may not have all the answers, we certainly have many of them! Make an appointment to see your Business Connect Advisor and we can give some guidance on businesses you can connect with (though you’ll still need to do your due diligence).

Western Sydney Business Centre, offers 4 hours business advice at NO COST with a NSW Government funded Business Connect Advisor. We can talk about any concerns with your business, and help you connect with others. Please book here now!