I had a client contact me about social networking. They were a medium size business that really had no idea how to join the conversation. I took a look at their site and blog.
The problem is that I am booked with advertisers until the end of the year. I run a one man shop. Plus I am taking a long vacation in about two weeks.
So there was no way I could give this client the attention they deserve. So I refereed them to someone I could trust.
Now I do not take a referral fee. I just want to make sure the client needs are meet. And I know with my present workload, year end burn out and VACATION coming up I really won't be able to work with this company until the 5th of next year.
I would rather refer a client then do a bad job. Because doing a bad job with a client takes to much energy and time. Doing a good job with a client takes less time then dealing with an unhappy client.
So if you feel that a client is not a good fit or you have a lot of jobs on the table don't be afraid to refer a client to someone you can trust to do a good job.
I always found that referrals have a habit causing more business down the road.

