Today I would like to delve into a topic that can benefit any business, be it commercial, office, industrial or any other service provider.
I bet this affects many of my readers. Why? Because we all need to use creative ways to secure new business and generate revenue.
For a lawyer, that means finding a new client with a legal problem. A plastic injection molding company? You have to find a customer in the market for plastic toilet seats. Medical practitioners continue to find new patients. And those of us who sell and rent commercial real estate are on the lookout for a landlord with a vacant building looking for a buyer or a tenant or a buyer or a tenant in looking for a business residence. Easy, right?
Whether it is a new customer, a customer or a patient, all have certain characteristics. We call this an “ideal customer”, a target audience or a prospect.
Our commercial real estate practice typically involves a family-owned manufacturing or logistics business in transition. Transitions lead to commercial real estate transactions.
A simple example is the acquisition of a competitor. When businesses swallow a competing business with their own set of customers, real estate, machinery, and employees, the result is a Brady Bunch of operations.
Often the “married entity” has too many buildings. Therefore, one or more must be dropped. This is where our team comes in – to find a tenant, sub-tenant or buyer for the overrun.
So, with this explanation in the background, how do you find companies in transition?
Certainly, we use conventional methods such as direct mail, advertisements, social media, calls, etc. But we are limited in the number of contacts we can establish. This is where strategic networking comes in. Let me explain to you.
You see, the company I described – a company in transition – relies on several professional service providers – also called trusted advisors. Accountants, investment bankers, commercial insurance agents, transactional lawyers, wealth planning lawyers, investment bankers and wealth advisers are all consulted regularly.
A CPA will typically be in contact with an operation several times a year to audit financial statements, prepare taxes, and possibly provide payroll services. Whenever working capital is needed to purchase machinery, equipment, hire employees, or purchase a building, an investment banker gets a nod.
Trade assurance? These policies are renewed annually. Compare that to the number of times a commercial real estate broker is in contact. When we carry out transactions, our involvement is daily. Once the transaction is concluded, the need for our services diminishes. Therefore, knowing the above service providers can become a stable source of referrals, as they will usually know whether the entrepreneur is expanding, contracting, making money, considering selling the business, getting divorced or approaching the expiration of the lease in its business premises.
But beware. Strategic networking is not just about phoning trusted advisors and asking for referrals. These relationships should be nurtured over the years with the idea of adding value to their customers and referring business to them.
Adopt an attitude of giving without expecting to receive and you will be fine.
Allen C. Buchanan, SIOR, is a principal at Lee & Associates Commercial Real Estate Services in Orange. He can be reached at [email protected] or 714.564.7104.