A: Current customers are terrific resources for cultivating potential new customers for your small business. Employees are also a good source of referrals. A satisfied customer is your best advertisement, so you are right to harness that good will.

Whether your are a one-person micro-business operation or a business with many employees, encouraging your current clients and employees to make referrals is a smart marketing move. And the best way to get referrals is to ask for them.

The best time to ask a satisfied customer for a referral is right when they're feeling the best about you. Depending on the formality of the situation and your relationship with them, either just ask them, or mail a follow-up letter, thanking them for their business and asking if they have any colleagues, friends or family who might be interested in your products or service.

With the letter, include a form that makes it easy for people to write out names and addresses, as well as a stamped, self-addressed envelope. You want to make it as easy as possible for your happy customer to return their list of referrals to you.

Also send the form letter to regular customers - even if they haven't bought from you for awhile - and distribute it to employees who can direct new referrals your way.

Remember that you're asking these people for a favor. Some people won't feel comfortable referring business to you and you should respect that. But a small incentive is often enough to persuade many people to direct business your way. Consider offering a reward for any successful referral a customer or employee provides. Rewards could include discounts on products or services, a bonus in the paycheck, or a gift certificate, or some other token of your gratitude.