You’ve probably heard the old saying that you “have to spend money to make money.” That’s certainly true when it comes to marketing your small business. Positive word-of-mouth is a fantastic thing to have, but if your marketing plan begins and ends there, it’s likely that you may be shortchanging your business’s potential for growth and success. This month, I’m here with insights on how a small business owner can reach more customers and raise awareness of their brand — without breaking the yearly budget.
Q: I have zero marketing experience. Where do I even start with my marketing plan?
BK: The same place all successfully executed marketing plans start: with research. Research your market, your ideal customer, and your competitors. The good news is that this first step is typically inexpensive or even free. For example, you can study your local market with a trip to the local library, or using online sources such as the U.S. Census Bureau, Censusscope.org, and USA.gov. You can learn more about your ideal customer by surveying or interviewing current customers, or by using online surveys. And you can research your competitors through trade publications, the local media, and their own websites. Looking for gaps in your market and weaknesses in your competitors is how you’ll find opportunities for your business to grow (without having to spend the kind of money that might be required to go head-to-head against a more established brand).
Q: How do I determine my marketing budget?
BK: The actual percentages you’ll end up allocating to marketing will depend on your location, your industry, the size of your business, and your business’s growth stage. Newer brands usually spend much more on marketing efforts compared to more established brands. The U.S. Small Business Administration advises that, as a rule, “small businesses with revenues less than $5 million should allocate 7 to 8 percent of their revenues to marketing” (sba.gov). Whatever numbers you ultimately settle on for your marketing budget, what’s most important is that you spend wisely. Each dollar spent should be intended toward a specific deliverable.
Q: How can I get the most marketing bang for my budget?
BK: Certain things are an essential for any small business’s marketing plan. For example, nowadays it would be difficult to find many successful businesses that didn’t have their own websites. However, beyond the essentials, you can be creative, using your understanding of your market and customers to decide where your marketing dollars are best spent.
Some budget-friendly examples: joining your local chamber of commerce is a must-do. Social media can be a very inexpensive means of engaging with your ideal customers, as can an email newsletter. Participating in local trade fairs can be a great way to share information about your product. Sponsoring a charitable community event earns positive attention for your brand — it could even be providing the food or a service for that event if your budget doesn’t allow a large cash contribution. Finally, don’t overlook the strength in numbers. Informal partnerships with neighboring shops or overlapping brands can help you grow faster than you might have been able to on your own.
Bridgett Kidd is an experienced financial professional who serves as Member One’s Vice President of Business Services and Lending. Her financial education series offers tips for making smart decisions when it comes to managing your small business.
Tags: Business, Finance
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