For Small Business Owners & the Self-Employed

Insider Secret:

Marketing Is Not An Option No Matter What

If you own your own business and you want to grow, you must actively and continuously market your products and services regardless of the circumstances.

by Alex Goumakos, CPA

Note: The following is adapted from Chapter 9 of Gold Mine Tactics: The Business Owner's Success Manual.

As a CPA, I see far too many business owners who use a shotgun approach when it comes to marketing. They make several key mistakes. First, they spend way too much money on inappropriate media. As an example, they’ll spend money on radio when they should be using newspaper, or they may focus strictly on direct mail when they should be doing a little bit of everything.

The second mistake owners make is that they quit too soon. Marketing is a process. It involves a properly designed strategy and a wholehearted commitment to investment and repetition. The secret to marketing is to view it as a bucket with holes; no matter how much water you put into it, it’s always going to turn up empty unless you put more water back into it.

How do you think large companies like Coca Cola, McDonalds, and Disney got to be that way? Do they market because they’re big? Absolutely not! It’s because they decided a long time ago to direct a substantial portion of their earnings each year towards strategic marketing. (These big companies, by the way, were once small businesses too!)

There’s no reason why a small business shouldn't be investing a portion of their earnings on marketing. In fact, a consistent marketing strategy is usually what separates gold mine businesses from mediocre ones. Marketing pays, especially during down times.

When times get tough, or when sales pools dry up, some business owners make another error: they cut back on their marketing efforts or cut it off completely. This is a big, big mistake. In fact, research and experience shows that companies who continue to invest or even increase their marketing efforts during slow times manage to outperform businesses that don’t. In addition, companies that increase their marketing efforts during economic downturns, rebound much quicker when the economy gets better than businesses that cut back.

As an example, at the end of 2001, Kmart cut it’s marketing by 50% and suffered the worst sales in a long time. Eventually the company filed for bankruptcy. On the other hand another company, Ace Hardware, doubled its marketing expenditures during the same period and had it’s best sales ever.

As a business advisor, I’ve worked intimately with hundreds of companies in dozens of industries. Guess what the highly successful ones all have in common? They religiously invest a portion of their earnings in acquiring new business. They invest anywhere from 3% to 10% (and sometimes more!) of their annual gross revenues in strategic advertising and promotion. Guess how much the slow or stagnant businesses invest in marketing? If you guessed little or none, you’re right!

Keep in mind also, that it’s not only how much you spend, but what you spend it on that counts. If you own a business and you want to grow, remember that marketing is not an option. It’s an investment in your company’s growth and future earnings much like the purchase of a piece of equipment or the decision to hire an additional employee.

Additionally, marketing is an insurance policy. If you’re successful, it’s the key to staying that way. Sergio Zyman, former Chief Marketing Officer of the Coca-Cola Company said this about success and marketing: “Success is perishable: you can’t take your business for granted no matter who you are.” In other words, it doesn’t matter how big or small you are, if you don’t market on a regular basis you will fade away too!

All you need to do is look at what happened to Levis, Snapple and Converse Sneakers. When was the last time you saw a commercial for these one-time brand giants? By the same token, look what’s happened to Adidas. They stopped marketing in the eighties and virtually vanished from sight. Now they’re back in a big way thanks to marketing. Sure these are big businesses, but the same rules apply to smaller businesses too. In fact, they apply even more.

A small business can’t rely on millions and millions of people all over the world to remember them. If you expect your business to grow to any size, you must become an effective marketer, advertiser and promoter of your business. To do this, you need to develop an aggressive and consistent marketing strategy.

In Gold Mine Tactics: The Business Owner's Success Manual I discuss the basic elements of marketing and show exactly what's needed in order to develop an effective marketing strategy. I then present dozens of tactics and strategies to help you light a fire in your sales department. I also cover why smaller business people don't market and what you can do about it. To learn how this manual can help you to explode your sales, click here.