7 Steps for Asking a Friend to Do Business

What You Need to Know

Other financial professionals have courted your friends.
A hard-sell approach will turn them off.
A little of the right information at the right time could win them over.

Let us stretch the word “friend” quite a bit.

You know people who could be great clients.

They have disposable income, money which could pay insurance premiums or become monthly investments in retirement plans or mutual funds. They might be sitting on a cash nest egg.

How can you approach them to do business?

Start by realizing you are not the first person with this idea. They can see you coming. They know the wheels are turning in your head.

Even worse, they have been approached by people using a very crude approach like: “You have money. I sell something that costs money. Therefore, you should give your money to me and I will give you my product.”

Here’s a better, seven step approach.

1. Identify the need and research the issue.

After knowing them for a while and listening carefully when they speak, you realize they have a big problem on their mind.

It distracts them.

From the clues you have picked up, you realize they have aging parents who need care.

2. Discuss the issue and demonstrate understanding.

This is human-to-human behavior.

There is something on their mind. As a good friend, you are concerned. You tactfully try to draw them out.

3. Assess the level of comfort or unease.

When you speak knowledgeably about people’s concerns, they might suddenly see you as a life preserver thrown to a drowning man.

They needed help and didn’t know where to turn. They’re thrilled you spoke up.

On the opposite end of the spectrum, they might compartmentalize.

They might think that this subject is in the family backet, and that you’re in the friend bucket.

They might say, “I appreciate your interest, but this is none of your concern.” In the second case, back off.

4. View the situation objectively, as a third party.

Your friend might not see the forest for the trees. You can take a step back and look at all the options.

One option might never have been considered because their mind says, “Don’t go there,” or “That would never work.” You can make a list of all the potential solutions or approaches to the issue.

5. Offer to do something for free.

This step also involves “selling the firm.”

That guy with the very crude approach might have said, “This is an insurance problem. I sell insurance. You can buy insurance from me.”

Your friend might have felt that you were trying to take advantage of their difficult situation to make money for yourself.