Many new business owners see the successes of others and assume they had the knowledge to make their business successful from the beginning. People with multiple degrees and unlimited resources make mistakes and fail. Mistakes are a part of small business and they teach us lessons that will guide us to success.
Many of the mistakes made will be in marketing. The reason? Because there is no right way for all businesses. What works for one business will not necessarily work for your business. There are too many variables to get it right on the first try. This doesn’t mean we don’t try to benefit from best practices, research and advice from experts. It simply means that with all the available tools and knowledge, trial and error will be necessary.
Step 1 – Make Mistakes on Paper
- Marketing Budget – How much money do you have available to spend for marketing?
- Customer Profile – Details about your target market including their location, income, gender, age, etc.
- Buyer Persona – This is the customer’s view of your product / service and how they would go about looking for your product / service. Examples:
- A definition of their need or problem from their perspective
- Words that interest them and words that would turn them away.
- Places they frequent when they have a need for your product / service
- Who and how they discuss their need or problem that needs to be solved
- Your definition of success – Your vision for wealth, purpose, time investment, and size of company.
Inventory your marketing options so that you can assess which are within your budget and have the highest probability for success. From the remaining that are within your budget, prioritize them in the order you think best suits your business and your buyer persona.
Starting with the first marketing option, simulate as much as you can without committing the dollars to implement. Here are a couple examples:
Craft Fair Booth – Let’s say you are selling a craft, food item, art, etc. Before buying space at a craft fair and building a booth, attend a similar craft fair and talk to people about your product. Rather than seeking approval, encourage negative feedback and LISTEN to what they have to say. What are the detractors that you can avoid? Will there be enough interest?
Search Ads – You have a web site that you sell products and/or services. You want to advertise on Google using AdWords or AdWords express. Before building your campaign and committing your bid per click, test out your keywords using free tools. Google offers a tool called the Keyword Planner (https://adwords.google.com/KeywordPlanner). Using this tool, you can get an idea for how many times people search for your keywords and the likely cost. Popular is not always good. Popular keywords will likely cost more and have significantly more competition. Look for the differences in your product as described in our article (How to Test Your Small Business Idea – Part 2). Using those differentiators, determine which keywords have sufficient usage but less competition.
Step 2 – Select Multiple Marketing Options
For many reasons, it is best to blitz several marketing options simultaneously or at least within a short timeframe. First, if you strike gold and get a lot of traction, you have multiple marketing tools helping to grow the brand quickly. Second, you have other fixed expenses that increase your debt or drain your operating capital so the sooner you bring in revenue, the less you will deplete your cash.
Step 3 – Implement and Monitor
Determine a threshold that identifies a successful marketing option. Usually it is tied to some quantity of sales. Implement the multiple options as closely together as possible. As clear failures emerge, pull those options and redistribute their budget to those that are generating results.
Step 4 – Tune
Experiment with each successful marketing option by fine-tuning to optimize its return on investment. Look for opportunities to scale up those that generate the best cost of customer acquisition (cost of marketing / number of customers it yields).
Step 5 – Assess
The four steps that we discussed in “How to Test Your Small Business Idea – Part 1 & Part 2” were your first opportunities to filter out ideas that won’t sell. Marketing is your second opportunity. If after following all of the steps above, you have not reached your threshold revenue, you have three options: 1) Abandon the idea and come up with a new idea, 2) Modify the idea significantly enough to change the customer profile / buyer persona, or 3) Gamble that the idea is good and obtain financing to purchase more expensive marketing options.