The reasoning is not only altruistic. An enquiry that is wrong for you is usually right for somebody, and being the person who knew where to send them is a small form of value that gets remembered and repaid. In a local market particularly, the people making enquiries know other people making enquiries, and a business with a reputation for being helpful receives more of them.
Reply within a day, because the timing does most of the work. A prompt no is a courtesy that lets somebody approach the next option while the need is current. The same no after three weeks of silence is a cost you imposed on them, and it is remembered as such regardless of how gracefully it is eventually phrased.
Keep it short and do not over explain. Two or three sentences saying it is not a fit, ideally naming somebody who would be, is sufficient. Detailed reasons invite negotiation, and a lengthy explanation of why you cannot help reads as a justification rather than an answer.
Refer where you genuinely can, and be honest where you cannot. Suggesting a specific person or business is considerably more useful than a category, and it is also a favour to whoever you refer to, which builds the reciprocal habit. Where you have no suggestion, saying so plainly is better than inventing a direction.
What is not worth doing is a considered response to something that is obviously automated or a mass solicitation. Those are not enquiries and treating them as such consumes time for no return. The distinction is usually apparent within a line or two: a real enquiry, however unsuitable, describes a specific situation.
Keep a short standard message and adapt it, because writing each refusal from scratch is what produces the delay that makes this feel burdensome. Two or three sentences you can send in under a minute means the reply goes out the same day, which is the part that actually matters.
Watch the pattern in what arrives, because it is positioning information. If you are repeatedly declining the same type of enquiry, your marketing is describing a business you do not want to run, and the fix is upstream in how you describe yourself rather than in how you decline. Consistently attracting the wrong work is a signal rather than a nuisance.
And be careful about the enquiry that is nearly a fit, which is the genuinely difficult category rather than the obvious mismatch. Work you could do adequately but would resent produces a poor outcome and a review that reflects it, and the temptation to accept it is highest during a quiet month, which is exactly when the judgement is worst.
Notice the enquiries that arrive at a bad moment rather than being genuinely wrong, since those are the ones most often declined by accident. Somebody who contacts you during your busiest fortnight may be an excellent fit whose timing was poor, and offering a later start rather than a refusal keeps the opportunity while protecting the current work.
Keep a record of what you declined and why, briefly. Over a year that list is the clearest description of your actual positioning that exists, and it frequently reveals that a category you consider peripheral is arriving regularly enough to be worth serving deliberately.
Answer from the business address rather than a personal one, even for a decline. It keeps the record where it belongs and it means somebody who returns in a year reaches the business rather than an individual who may no longer be reading that mailbox.