A Small Marketing Budget Will Kill A Start-Up CompanyBy Dave Kahle
Question: I started a new company one year ago, and I have a small marketing budget. I’m unable to pay for any sales courses at this point in my business, but I have been able to read a few books on sales. What would you do in my position to attract customers and build relationships?
Answer: Understanding that hindsight is always clear and accurate, I would not have gotten myself into this position to begin with.
One of the things that I have learned over the years has to do with how incredibly difficult it is to get a new thing – a new company, a new product, a new idea – started and growing to the point where it is profitable.
Whoever said “Build a better mousetrap and the world will beat a path to your door,” was delusional. That expression has brought more pain and frustration into the world of small business than almost anything else I can think of. People actually believe that all they need to do is provide a little bit better product or service and everything will take of itself.
Believe me, the economic landscape is littered with the bones of start-up companies and their principals who believed that untruth.
If your company has the slightest chance of succeeding, you will need to clearly describe the advantages and benefits that your company or service brings to the market in such a way as to make it seem more difficult not to buy than to buy it.
You’ll need to clearly and accurately describe your market segment in the most detailed terms possible. You’ll need to identify the individual members of that market, or at least identify specific means and methods of communication to that market. You’ll need to package your offering in attractive terms, and deliver that message powerfully and repetitively to that market. You’ll need to capture the names and demographic information of your buyers, so that you can appeal to them to purchase again. You’ll have to have some way to gain referrals and word of mouth business.
All of this comes together in one of the laws that I have formulated over the years.
Kahle’s Law of New Business Marketing #1: If you are going to create a new business, or market a new service, you must spend roughly the same amount of time and money to develop the system to sell that service as you did in developing the service itself.
In other words, if it took you two years and $100,000 to get your new business ready for market, it will take you two years and $100,000 to get your system ready to sell your products. That doesn’t mean that you will sell one thing. It just means that you need to spend that much to get the system ready to sell. You can rightly conclude, then, that most small and new businesses fail because they don’t budget enough time and money to create their selling system.
So, what is my advice to the questioner? I don’t mean to seem harsh, but I’m coming from decades of experience with these kinds of things. I’m trying to save you a year or so of excruciating difficulty. Forget trying to build a business with no money for sales or even a small marketing budget. Find a job. Save your money, try it again when you have money to invest. This will be far less expensive, time consuming, and emotionally draining than trying to do it with no budget.
Dave Kahle is one of the world’s leading sales educators. He’s written nine books, presented in 47 states and eight countries, and has personally worked with over 287 companies, helping enrich tens of thousands of sales people and transform hundreds of sales organizations. Sign up for his free weekly Ezine.