A lead is an enquiry, not a customer. Someone has asked you a question — a call, a form, a message — and might buy. Lead generation is the work of getting more of those enquiries, and then the part most small businesses skip: answering them fast enough, and often enough, to win the job. The cheapest enquiries come from people who already know you. The most expensive come from companies that sell the same enquiry to your competitors.
At a glance
| Feature | Detail |
|---|---|
| What a lead is | An enquiry — someone who has asked. Not a customer, and not money in the bank |
| Cheapest source | Referrals and repeat customers — nothing per enquiry, and they turn into jobs most often |
| Second | Local search — people looking for what you sell, right now |
| Third | Paid ads — sensible once you know what an enquiry can cost you |
| Last | Bought and shared leads — often the same enquiry sold to several businesses |
| Where jobs are won and lost | How fast you reply, and whether you follow up more than once |
What a lead actually is
A lead is an enquiry. That is the whole definition, and holding on to it will save you money, because an enquiry costs you and only a customer pays you.
The next question is whether an enquiry is worth having: does this person want what you actually sell, are they in the area you cover, and can they pay? An enquiry that fails any of those is not a small win, it is a phone call. Businesses that count enquiries as success end up busy, flattered and skint.
So count two numbers, not one: how many enquiries you got, and how many became paid work.
Where leads actually come from, cheapest first
Referrals and repeat customers. The best enquiries you will ever get, and they cost nothing per enquiry. Someone who was recommended arrives half-sold, argues less about price, and turns into work far more often than a stranger. This is not luck — it is doing good work, then telling people you are taking on new customers and asking happy ones to pass your name on.
Local search. When somebody needs what you sell, they search for it and pick from the top few results. A complete Google Business Profile with real reviews puts you in that shortlist for nothing. Our guide to marketing a small business covers setting it up and which social platform suits which trade.
Paid ads. You buy attention and hope it turns into enquiries. That works once you know what an enquiry can cost you and still leave a profit, and it is guesswork with a bill before that. Winning customers is one of four ways to grow a business, and it is the one most people reach for first and measure last.
Bought and shared leads. Someone else generates the enquiry and sells it to you. Last on the list for good reasons, which are worth going through properly.
Bought and shared leads: what you are actually buying
Lead-selling services collect enquiries — a homeowner filling in a form for a plumber — and sell them on. The critical question is whether the lead is exclusive to you or shared, because a shared lead is the same enquiry sold to three or four of your competitors at the same time.
That turns it into a race. Everyone's phone buzzes at once, the customer speaks to whoever calls first, and the other three have paid for a conversation that never happens. You pay per lead whichever way it goes, so you can spend a week's budget losing races.
They are not automatically a bad deal. They can work for a business with spare capacity, a phone that gets answered instantly, and a clear idea of what a job is worth. They are the worst place for a brand-new business to start, because you are buying at the moment you are least able to answer within seconds.
How to judge whether they pay. Set a fixed test budget you would not miss. Log every lead: was it real, was it in your area, did you reach the person, did it become a job, what was that job worth after your costs. After a month, divide what you spent by the number of jobs won — that is what a customer cost you from that source. If it is more than a customer is worth to you, stop, and do not accept "you need to give it longer" as an answer.
Before you buy anything by the lead, know your own ceiling. See what you can afford to spend on marketing. Plan works out a marketing budget from your own numbers, so you know what a customer is worth before you pay to win one.
Two contract details to read before signing: the minimum spend or notice period, and what happens with junk leads — wrong number, wrong area, someone who never enquired. A provider who credits those back is a different proposition from one who does not.
What happens after the lead arrives
This is the part most small businesses get wrong, and it is free to fix.
Speed decides who gets the job. For anything urgent or shared, the business that replies first usually wins, and the gap between replying in five minutes and replying tomorrow morning is enormous. Aim to answer within the hour, every time. A missed call with no call back is an enquiry you paid for and threw in the bin — so set up a diversion, or a voicemail that promises a call back with a text sent straight after, and two fixed times a day when you clear the list.
Follow up more than once. Most people send a quote and wait. Send it, nudge once after two days, once more a week later, then leave it. That is not pestering; people are busy and quotes get buried. A short, friendly message — "just checking you got this, happy to answer anything" — wins work that was otherwise lost by silence.
Have your reply ready. Knowing in advance what you need to ask and when you could realistically start turns a scramble into a two-minute job.
Take Jamie, who runs a 24/7 plumbing business on his own in Reading. He charges £70 an hour, bills around 25 chargeable hours a week, and gets about 10 enquiries a month, of which 4 become paid jobs. An average job is £200 with roughly £40 of parts and fuel, so £160 is left over. He changes nothing about where the enquiries come from — he just answers or calls back within the hour and sends one follow-up on every quote. Six of the ten now become jobs instead of four. That is two extra jobs a month and about £320 more left over, on the same spend.
Measuring: three things per enquiry
Keep one line per enquiry, in a notebook or a spreadsheet, with three columns:
- Where it came from — ask every single person, and write the answer down rather than guessing.
- What it cost — nothing for a referral, a share of the month's ad spend for a paid one, the price on the invoice for a bought one.
- What it turned into — no reply, quoted and lost, or a job worth £X.
After one month that page tells you which sources bring work and which bring conversations, what a customer costs you from each, and where the next pound should go. It is the cheapest business intelligence you will ever own, and it takes about thirty seconds a lead.
Figures correct as of September 2026. Tax thresholds, fees and rates change; check the linked GOV.UK pages before acting. Prices and costs shown are indicative and vary by area and by what's included.
What is Plan?
Plan is a free business operating system for people starting or newly running a UK business. It walks you, one simple step at a time, from your elevator pitch through brand, product and pricing, to a complete business plan — then uses everything it now knows about the business to help with the basics: logo and brand, marketing, a website, a bank account, funding, insurance, company registration. You can use as much or as little as you want.
Frequently asked questions
What is a lead in business? A lead is an enquiry — someone who has contacted you and might buy. It is not a customer and not money in the bank. The useful test is whether the person wants what you sell, is in your area and can pay; enquiries that fail those are calls, not leads.
What is the best way to get leads for a small business? Referrals and repeat customers first, because they cost nothing per enquiry and turn into work most often. Then local search — a complete Google Business Profile with real reviews. Paid ads after that, once you know what an enquiry can cost you and still leave a profit.
Are paid lead generation services worth it? Sometimes, if you can answer instantly and you know what a job leaves you. Many services sell the same enquiry to several businesses, so you pay whether or not you get there first. Test with a small fixed budget, log every lead, and work out what a won job actually cost you.
How quickly should I respond to an enquiry? Within the hour, and within minutes if the enquiry is urgent or shared with competitors. Whoever replies first usually gets the job. Set up call diversion or a voicemail with an automatic text, and clear your messages at two fixed times a day.
How do I track where my leads come from? Ask every person how they found you and write it down, one line per enquiry: where it came from, what it cost you, and what it turned into. After a month you will know which sources produce paying customers and what each one costs.
Two ways to do this
Work out your own numbers, free. Plan takes your prices, costs and customer numbers and shows what a customer is worth and what you can afford to pay to win one — in your browser, one short question at a time. Do just this bit if that is all you came for.
Or get the enquiries brought to you. Want help getting customers? Our sister agency The Fractions runs ads and builds websites for small UK businesses — the pages, the ads and the enquiries behind them.