25 Jun BUSINESS SUCCESS. Get EXCITED about your marketing plan!
I have provided tax and accounting services to hundreds of small business owners over the past 12 years. Our practice has been here since 1992, and when you add in those years it has been thousands of business owners.
In that time, many businesses have succeeded and some have failed.
I am getting to the point now in my career that I can usually identify very quickly in an initial appointment, with a up-start entrepreneur, whether they have a really good chance at surviving. This “intuition” was not developed only in business school, rather it was sharpened by sitting across the desk of hundreds of these small business owners and listening to their whole, honest, and un-cut stories of what is going on in the trenches of their businesses day-to-day.
From what I have observed, one of the major differences between success and failure in a small business comes down to where the business owner is focusing their time.
If the business owner is having a first appointment with me to discuss their business concept, I will often ask a simple question like, “Tell me about your business, and why will it succeed?” I then let the client talk, and I keep my mouth shut. It is here that I learn the most about the three areas of their business 1. Marketing, 2. Operations 3. Finance/Administration.
1. Operations. If the client talks about primarily operations at first, then I know their chance of success is slim. Many times a new business owner will talk only about what kind of hats/uniforms the employees will wear. Or, how their company will have a written operational system of process’ and procedures that may be a bit better then the competition at efficiently delivering their product. I know that operations, and continuously improving operations, is critical, but it that should not be the WHOLE dialoge and focus!
2. Finance and Administration. If all the client talks about is how to legally avoid taxes, or financially/administratively save the company costs, then this is even worse! This almost never happens, by the way, during a first appointment (thankfully). It is usually the latter (operations) that they talk about most, at first. I let them know that the financial/administrative piece is why they hire our firm, and WE take it very seriously. It is OUR job to save them time so that they can focus on marketing and operations. This is when we get to the third component of their business (and this is the one I hope that they are really excited about)…
3. Marketing and Sales. If a client is initially coming in, and they are fired up about getting their product or idea out to the market, I know their chance of success is much higher! It excites me, because I know they will be more successful. If they are primarily talking about their competition, marketing plan and strategy, how their customer needs them to help them solve their “problems”, I know this person will have a fighting chance. If they then tell me that they have a marketing plan that explains what they will do to get a certain amount of customers, by when and how much it will cost I really become excited for them! Then, if they tell me that they have enough capital to invest in that marketing plan and ALSO the operations (initially) to do the work that the marketing plan reaped, I know they have a good grip on what it takes.
If, however, they don’t have a marketing plan, that tells them how much revenue may come in, by when, I send them off to make one. Why? Because, why would you ever sign long-term leases, risk your life-savings, or put money in any business unless you had a decent idea of how much revenue it would bring in (gross). The best way to do that is with a marketing plan. It is only after you know your gross income with a marketing plan that you can estimate your costs/overhead/etc. to come up with your net profit and cash flow to figure out if you have a good shot at a return on your investment in your business.
In my opinion, a marketing plan must happen before you figure out the rest of your business plan. You really need to know if you have a market, and potential customers. Also, a marketing plan will act as a compass as you navigate your business to see what marketing ideas are working, and what marketing ideas are not. Later, you will go back to your marketing plan and delete what did not work, and allocate more financial resources to what does.
There are countless books and resources available about how to prepare a marketing plan. Like anything else, if you are serious about someting you will invest the time to do it right. I encourage all business owners to take the time to prepare a marketing plan, and then a business plan.
You should really get EXCITED about the marketing plan!!!
Todd Unbehagen, MAFM, EA, ATA, ATP
President, Unbehagen Advisors