Hottest Business Ideas for 2002

Referral Service

BY Laura Tiffany | January 1, 2002|

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People are busy. Very busy. And many don't have the time or energy to scour the Yellow Pages and call around for price quotes and credentials when looking for services like attorneys, child care and home repair. So what do you do? Create a network of suppliers, check their credentials, charge them a referral fee, and open up shop.

Referral services are a brilliant way of capitalizing on everyone's favorite marketing tactic: word-of-mouth. "My husband and I had just purchased our first house and were struggling to find reliable home-improvement contractors," says Debra M. Cohen, founder of Hewlett, New York-based Home Remedies of NY Inc., a home maintenance referral agency with 220 licensees nationwide. "When I finally found a responsible contractor, I felt compelled to share his name with other homeowners in need of his services."

One of the most famous referral services is 1-800-DENTIST, a toll-free service where users can call and find recommended dentists in their area. Other types of referral services include attorney, elder care, child care, apartment and even sleepaway camps.

"The balancing act in operating a referral business is, you're providing a service to two separate groups of people," says Cohen, who spends much of her day on the phone. "[I] earn commission for any work secured from the contractors I represent. At the same time, I select contracts carefully so as to maintain a high standard of quality and service for the homeowners who use my services. Ultimately, both groups need to be satisfied."