The cheapest sources of new business for a small company are almost always the unfashionable ones: asking existing customers for referrals, following up people who did not buy, and being findable locally. They work because they start from someone who already knows you, which is the hardest part of selling to a stranger.
Work through these before spending on advertising.
Ask existing customers
Satisfied customers refer when asked and rarely when not. A direct, specific request, naming the kind of customer you want, produces far more than a general hope that word spreads.
Selling more to existing customers is the other half of this. Retention costs a fraction of acquisition, and most small businesses have not told their own customers everything they do.
Follow up the people who did not buy
A quote that went quiet is not a no. One polite follow-up recovers a meaningful share of lapsed quotes, and almost nobody does it, which is precisely why it works.
Keep a record of who you quoted, what they needed and when to check back. Nothing about this requires software.
Be findable where people look locally
A complete free business listing with accurate hours, location and reviews frequently produces more enquiries for a local business than any paid campaign, at no cost.
Reviews do the heaviest lifting. Ask for them deliberately after good work, and respond to every one, particularly the poor ones.
Partner with businesses serving the same customer
An accountant for a bookkeeper, an electrician for a builder, a caterer for an event planner. Referral arrangements cost nothing until they produce something, and they compound because both sides benefit.
Where you pay for a referral, or receive payment for one, disclosure obligations may apply under the code administered by the Advertising Regulatory Board, and any contact details you collect carry data protection duties overseen by the Information Regulator.
Frequently asked questions
What is the cheapest source of new business?
Referrals from existing customers, asked for directly and specifically rather than hoped for.
Is following up old quotes worth it?
Yes. A single polite follow-up recovers a meaningful share of lapsed quotes, and almost nobody does it.
What is the best free channel for a local business?
A complete business listing with accurate details and reviews, which often outperforms paid campaigns.
How do referral partnerships work?
With non-competing businesses serving the same customer. They cost nothing until they produce something and compound over time.
Do I need to disclose paid referrals?
Where money changes hands for a recommendation, disclosure obligations can apply, and collected contact details carry data protection duties.
Further reading
Originally published in September 2018. Updated September 2026 into guidance on the lead generation methods that actually work for small businesses.
