While cutting costs can be beneficial, it may also be fatal if accomplished without cautious attention to consequences. Therefore, if your goal is to maintain low external expenses, it may come at the cost of producing revenue. Many small business owners might imagine being frugal helps them increase their revenue, but frugality placed within essential areas directly connected to growth can be counterproductive and lead to a host of problems and disappointment.
Recently, a neighbor child came over and proudly provided a postcard inviting our family to attend their upcoming local theatre play in which she and her brother were performing. Wanting to support their interests, this nicely designed postcard included a web URL to purchase tickets and touted their “new website”. Upon visiting the website, a large “Buy Tickets” button was placed below a matching graphic. After clicking this button, I received a new black page that read, “This site can’t be reached”.
As a marketing professional, I was in horror and immediately called the phone number provided, only to be sent to voicemail. Hours later, a return call from a defensive business owner told me her “website works fine” on her phone and that perhaps the site was being “worked upon” when I tried to purchase tickets. Unfortunately, it was not my timing but the lack of attention to the importance of securing the website pages with an SSL certificate to allow for online transactions. An easily fixed error overlooked by either a novice web builder and/or a frugal business owner misjudging the importance and vital role best left to a professional. This a point to remember when deciding what’s essential to get right and the unintended repercussions of DIY owners.
Market and promote your business
It takes money to make money, so invest wisely. Small business owners often don’t spend enough budget on the best types of advertising and marketing needs that directly relate to their audience. The key to spending money is tracking the activities directly related to the ad spend.
Our rule of thumb is to spend 5% to 8% of your goal gross revenue ongoing and perhaps as high as 15% to 20% to get started. This means if you’re clearing a general profit of $100,000 in your business, you should begin spending $10,000 to $15,000 in advertising and marketing now and $5,000 to $8,000 ongoing thereafter scaled accordingly to increases in profits.
Once fueled with the right advertising and marketing spend, your business ought to be on its way to accomplishing increased revenue and a measurable ROI. Keep away from spending based completely on where your business lies today; instead, spend based totally on where you want your business to be the day after today. If this isn’t currently possible for your business, then take it in stride. The concept here is that the commonplace 5% to 8% of sales philosophy may be too low for actual growth, particularly if you are a startup with low revenues or a business in a noticeably aggressive niche or market. Alternatively, remember advertising spend percentages: one that sustains your current gross sales and the other that promotes growth. Keep in mind that your ROI should help dictate your advertising spending.
Balancing serving existing customers versus acquiring new ones
Smart business owners hedge new customer acquisitions as a hedge against losses that may occur organically in existing customers. In my experience, many business owners are slow to react or forecast this essential blend to sustain their businesses.
Make certain that your customer service and sales groups have the necessary tools they need for success. That is what I call “advertising insurance”. At LeadSprout, we provide our clients with fully-built campaigns and the marketing tools to manage the expected new leads and automate the communications needed to maximize your opportunities for sales.
We help to make sure that your advertising dollars (the 5% to 8% of aim gross revenue) convert into sales and a positive ROI.
It’s awful to see any business put money into advertising and yet ignore things like training your receptionist who answers the phone or implementing a combination of marketing automation and process in place to transfer valuable leads to the sales crew who closes deals with customers. It’s nearly continually cashing nicely spent with regards to communications systems with clients, income displays for product clarity, and modern gadgets on your workers.
In brief, if you’re going to spend hard-earned dollars to get leads, make sure there aren’t leaks in your marketing strategy and funnel to lose or mismanage leads.
Now everything can be DIY so thoughtfully decide
Too many small business owners are overconfident in terms of tasks that ought to be treated by means of specialists and I’m not immune either at times. The choice to keep profits and “do it yourself” regularly comes with unintended results. By weighing the importance to your business of each task, you can make thoughtful choices on when and where to reach out for professional help.
The business owner who decides to save money by constructing their own website may additionally in no way understand that their efforts may undermine their website’s performance to save thousands of dollars but lose tens of thousands of dollars—perhaps hundreds over time. Branding and advertising and marketing DIY initiatives regularly backfire because they tend to yield low organizational credibility and lack key marketing messaging and performance tracking.
Even as some DIY flops can create those “we’ll look again at this sooner or later and chuckle” moments, many can critically stifle growth due to a lack of awareness. Astute business owners are aware of their strengths and hire professionals to fill in the many gaps. Leaders lead and delegate their vision and help to move the business forward at a greater pace and with greater clarity and performance. To avoid costly mistakes, reach out to LeadSprout for sound marketing services advice, and performance from your marketing efforts.
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