Small Businesses Need a Marketing Plan
As an entrepreneur, you don’t put your heart and soul (and life savings) into something to fail. Yet, According to statistics published in 2017 by the Small Business Administration (SBA), about one-fifth of business startups fail in the first year and about half of all employer establishments fail within five years. Only about one third survive ten years or more.
The reasons cited for failure in a variety of studies include lack of capital, mismanagement, over expansion, lack of a clear business plan, not executing/implementing marketing strategies and more.
When properly executed all of the above elements work together to create success. However, even when the other aspects of your business are working, not having a consistent, cohesive marketing strategy can throw a wrench into your entire operation.That’s because marketing is the vehicle to amplify all other efforts of your business.
But marketing is complex and comprised of so many pieces – online and offline, inbound and outbound, traditional and through social media, lead generation and SEO, and more. And as a business owner, it is imperative you understand the components of marketing and the role they play in making your business a success.
However, even if you’re not an expert in all the marketing disciplines, you need a basic awareness of how they work to formulate and execute on a holistic, comprehensive marketing plan. And if, you feel you lack the expertise, there are resources you can turn to including business organizations, trade associations, consultants, business coaches and more. Often an outside expert can see your blind spots and address them with a plan that can not only save your business from failure, but increase revenue.
Organizations like the SBA and SBDC exist to provide entrepreneurs with the basic information on how to launch a business, including how to write a business plan and where to find funding. Having the foundations of your business model in place allow you to develop a marketing plan tailored to your objectives.
Additionally, business coaches can be extremely helpful in providing support. What gets you from zero to $100,000 isn’t the same thing that will get you from $100,000 to $500,000 or to your first million and beyond. Business coaches with marketing savvy understand what’s entailed in growing a business and creating ongoing sustainability.
Highlighting the Problems
Here are two examples of entrepreneurs who came to me seeking help with content. Content is a key piece of any marketing strategy, but even the best content can’t make up for not having an overall marketing plan. These examples illustrate some basic issues that could have easily been avoided by having a marketing plan in place.
One day I received an email from an entrepreneur who hired me to write her blogs for the past 8 months. The email stated that she closed her business and went back to a corporate job. The reason – her niche was too small to generate enough income. This entrepreneur had been a savvy, successful professional before starting her own business.
She didn’t do the necessary upfront research to valid her market. It’s important to define who your customer is and if they want what you offer. More importantly, you need to ensure there are enough prospects within your customer segment to convert to buyers.
When you were young, you may have had a lemonade stand. If you did, I would suspect you lived in a relatively populated area. Imagine the kid that lives on a country road with his closest neighbor 3 miles away. He didn’t open a lemonade stand because he knew his market was too small. Simplistic, but I think it helps you understand that you must validate your market and ensure its large enough to scale your business to the level you desire.
Without a clear estimate of your potential market size and sales projections, you can’t tailor or target any marketing efforts to reach your highly desirable demographic. According to an infographic from Insurance Quotes, 42% of businesses fail citing “no market need for products or services.”
I spoke briefly with a potential client and she shared some facts about her business. She had been in business for just over a year. Her partner was a family member who was moving away and wouldn’t be able to provide support day-to-day. They had lost money every month since they’d been open. And while the majority of their clients were satisfied, they weren’t providing referrals. She also had to drop her prices to bring people in the door. Now she felt she was working for nothing.
Some do not consider pricing a marketing problem. But it is and here’s why. When you do your cash flow projections you want to evaluate your expenses. Break them down by how many people per day need to buy and at what price point. Let’s say you need to make $100 per day mowing lawns to support your family’s expenses of $3,000 per month. You can’t charge $5 per lawn and expect to mow 20 lawns per day. That’s not realistic. However, you could charge $25 per lawn and mow four lawns per day and work less than 6 hours.Simplistic. But, once you’ve determined your monetization model, you can market effectively. One CFO states that inaccurate pricing models contribute to 77% of all failed businesses.
Referrals should be part of every business’s marketing plan. It shows you have satisfied customers that will return. And referrals are less expensive than advertising to get new customers. As a part of your marketing plan, it is important to consider drawing customers in that become buyers, increasing their spend, increasing their frequency, and becoming an advertising source for you through referrals.
Not having a clear and evolving marketing plan is a recipe for failure. Companies that put effort into creating a marketing plan will see the impact in all other areas of their business. And then theycan leverage marketing for growth and sustainability.