If you are looking for help with sales, strategy and marketing, you might want to check out our newest program, The Three Questions Every Successful Business Person Must be Able to Answer. These three videos and workbook walk you through the powerful questions that Doug and Polly use with their personal clients to create successful business/marketing plans.
Q. My husband and I are in the process of launching our new business. A marketing company wants us to spend more than $20,000 on a host of marketing services (e.g., developing a company name and logo, business cards, letterhead, brochures, graphics standards manual, website, social media campaign, etc.). We could do this, but we would have to dip into our limited savings. Do you think this is a good idea?
A. Probably not, but let’s explore the issue before jumping to a conclusion. Decisions about how to market your business are some of the most important you will make. Obviously, you will have to market your company to succeed. Whoever said, “If you build a better mousetrap, the world will beat a path to your door,” was lying. If the world doesn’t know you have a better mousetrap, no one will be knocking on your door. Building a better mouse trap, by itself, is not enough. To succeed, you have to tell the world about your offering—you’ll have to market.
On the other hand, marketing can become a black hole into which you throw your life savings with no return. Too many marketing and advertising companies have a suite of things they offer. They then try to sell this same suite of products to every prospective customer, without regard for whether or not you will benefit from them. Because the only tool they have is a hammer, everything’s a nail. Be wary of such firms. They are happy to take your money but have little to no concern for whether or not your business grows. In our opinion, it’s unethical.
Dollars spent on marketing are an investment, but like any investment, there are good ones and bad ones. To be a good investment marketing dollars must have a positive return. That is a dollar spent on marketing must return more than a dollar. In our experience, few marketing and advertising firms are willing to hold themselves to this standard—find one that is.
Here’s a way to think about your marketing investment. First, you are going to need a few basics:
· Business name – It may be a good idea to hire someone who knows what they are doing, but don’t pay for an exhaustive study. A few hours of a professional’s time and a couple of brainstorming sessions should be sufficient. If not, you hired the wrong person.
· Business cards – In most businesses, without cards, you won’t be credible. You may want to get some help designing your cards, but don’t spend thousands of dollars. Shop around for a fair deal.
· Letterhead and printed envelopes – Our advice is to get printed envelopes, but insist that your letterhead be electronic so that you can print it on your color printer. We let a marketing company sell us printed letterhead and have probably used about one sheet per year. By the way, make sure that whoever develops the electronic version of your letterhead sets things up so that pages of your communication beyond the first one look good.
· Website – These days, every business needs a website. Most people will check out your website before doing business with you. It doesn’t have to be expensive, but it does have to explain your business proposition clearly and concisely. It also needs to contain your contact information so that people can get in touch with you.
· Email address – Your business email address should be your name @ your company’s URL.com. When deciding on a company name, make sure that the URL is available. Don’t use a yahoo, gmail or hotmail account. It will hurt your credibility.
Beyond these basics, don’t spend money on marketing until you know the segment of the market you are targeting and the best way to reach them. Answer the three questions every business must answer:
1. Why should a prospective customer buy my product or service rather than a competitor’s?
2. Is there a segment of the market that values the thing that differentiates my offering and is it large enough to support my business?
3. How will I reach this customer segment with my marketing message?
Only after you have clear answers to these questions can you put together a marketing plan that will have a positive return on your investment. Marketing is necessary. It can be costly. After you have the basics described above, make sure you have a clear plan for generating a return on your marketing investment before spending more money.
Q. I'm thinking about buying a business. Do you have any tips that will help me make this successful?
A. Buying a business is exciting. It can be very lucrative, or it can lead to financial disaster. Ensure your success by following the tips below.
Successfully growing a small business is challenging in any environment. It’s even more difficult in economically troubled times. In conducting research for our book, Let Go to Grow; why some businesses thrive and others fail to reach their potential, we discovered five tips that can help entrepreneurs overcome these challenges.
Every business owner must be able to answer one very basic question, “Why should a prospective customer buy my product or service rather than a competitor’s?” If the owner cannot answer this question, he or she should probably cut his or her losses and seek alternative employment. Fortunately, this isn’t a complex question. At its core, there are only two possible answers; either the product or service is being offered at a lower price or the offering must be differentiated from the competition’s.
A.You will most assuredly need a plan for your business. You may, or may not, need a formal business plan.
Q.Some friends have told me that I should have a business plan for the small business I am planning to launch in the fear future. What do you think?