Employee Agreements – Helping Protect from Loss to Competitors – Post #15January 11, 2018
Act Now: Your Owner’s Exit Plan Can’t Wait Until You Sell Your Business – Post #17January 25, 2018
Just about every day, I talk to talented entrepreneurs of all ages and stages of life. As I coach these brilliant business owners – doctors, dentists, veterinarians, manufacturers, pool builders, hair stylists, realtors, builders, and the like – I find that almost all of them are masters of their product or service. They do what they do well, but they don’t necessarily know how to make what they do into a successful business. Their educations gave them professional knowledge, but they lack business knowledge. So I help these clients come up with plans and systems to make the business side of their business simple. As I help direct their business’s growth towards its eventual sale, I stress the need for marketing. I’ve realized over the years that successful business owners need a marketing campaign system just as much as they need a business plan and a solid team.
Podcast Time Index for “Readdressing Marketing Systems – The Law of Sowing and Reaping”
- 00:33 – The Law of Sowing & Reaping – It’s not a waste of money
- 01:30 – The Three Phases
- 03:23 – How these Laws apply to Business
- 05:48 – Case Study
- 08:44 – The What, Why, Who, When, Where, and How
- 09:40 – What?
- 13:10 – Why?
- 16:18 – Who?
- 17:34 – When?
- 18:16 – Where?
- 20:48 – How?
- 22:44 – Marketing to Exit
The Importance of a Marketing Campaign System
A few years ago, I helped a client begin a business. Let’s call him Jack. Together we created systems and goals and vision statements. Under my guidance, Jack stacked his team bench. He wrote and implemented business plans. And he even developed a good marketing plan. Well, guess what? It worked, and it worked well.
Soon, though, Jack and his team became too busy to keep up. So we revised systems and team roles. At this point, Jack demanded that we stop all marketing. Against my advice and wishes, this fellow decided that marketing was “just a waste of money.” He opted to discontinue all marketing.
So let’s fast forward. It took a little bit of time, but before you know it, Jack’s professional team and I saw his company sales slow down. While his business started off well, he was now beating his head against a proverbial wall. His revenue was stagnant. Every time we met, I’d remind him to begin marketing again… restart it and increase it. Yet, time and time again he refused.
Eventually, the company slowed down to where business had become financially painful for Jack. When we met he agreed to restart his marketing. However, the success of the second marketing push took longer than the first. He had lost market penetration and momentum. After enduring two of the worst years in his company’s long-term sales’ history, Jack is just now experiencing renewed growth again.
Whenever we meet now, Jack wants to talk about marketing first. Why? Because it worked for him. And I find that marketing consistency works for my other clients, too.
Perhaps you’re content with your company’s revenue stream. Maybe, you don’t have enough revenue coming into your business. Either way, now is the time to develop and implement a marketing campaign system. A good marketing plan can increase your current sales and increase the value of the sale of your business in the future. So whether you think you have too much business or you need more, you’re going to want to understand marketing’s role in your business. Then, you’re going to want to develop a continual marketing campaign system.
A Marketing Overview
“Simply put, marketing is showing your potential buyers and customers who you want to be, not who you are today.” – Justin GoodbreadClick to tweet
Marketing is not a new concept to business owners. We’ve all heard this word. Most likely, you’ve used marketing in your current company. Let me redefine it for you. Simply put, marketing is showing your potential buyers and customers who you want to be, not who you are today. You want your buyers to think about what your product will be, not necessarily what it is. To show off your “ideal” service or product, you need to do three different things:
- Brand Your Business – Create a logo or visual imagery to identify your company.
- Advertise – Use media to get that visual image to the potential buyer.
- Relate to the Public – Get public relations media sources to tell your business’ story in a favorable light.
Who Should Market?
If you’re like most small business owners, you’re short on time. You may not think you have time to market much less develop a marketing campaign system. Well, that’s the furthest thing from the truth, friends. Every person in the organization markets whether you have a marketing campaign plan in place or not.
So, wouldn’t it be best to create a plan so that everyone markets in a similar manner? If you want to show off your culture of kindness, make sure all employees are kind. That’s marketing. Or, hire an agency or a team to create a uniform marketing campaign plan that shows the community how kind you are. However you chose to market, remember that all team members are a part of your marketing presentation.
When Should We Market?
Market twice as much when times are bad, and market to shape your persona when times are good. – Justin GoodbreadClick to tweet
By default then, if everyone is a marketer, then we’re marketing all the time. However, we business owners should develop formal marketing strategies from day one. OR, we should implement new ones or different ones if we’re already down our business road. We shouldn’t stop marketing until we have a signed sales contract and money in our pocket from our business’s sale. Market twice as much when times are bad, and market to shape your persona when times are good.
Where Should We Market?
It’s easy to see that everyone on our team markets all the time, but who do we market to? Where do we market? I could easily say that it depends on your national, state, or local location. At it’s simplest, that true. What works for one business may not work for another even within the same industry. Therefore, I try to get my clients to work with an external or internal marketing professional from day one. If you’re already in business, find one quickly to re-direct your current marketing strategies to the particular demographics of your market.
How Much Money Should We Devote to Marketing?
Once you’ve established a marketing system, you’ll need to allocate funds to it. Friends, if you have a billion dollars in the bank, and you’re producing more and more business, more power to you. Most of us don’t have that. We small business owners often feel like marketing is a waste of money because we don’t see immediate results. I’ve even had those thoughts.
Traditionally, though, I tell business owners in certain industries to allocate 5% – 10% of their annual revenue toward marketing management. And actually, that’s just to maintain their current income. I find that my clients who want to grow generally allocate 20% – 30% of the annual revenue to marketing campaigns.
Marketing is a Business Investment
What we business owners are actually dealing with in marketing, then, is an investment, not an expense. Even though the quantifiable marketing costs will show up on our Profit and Loss Statement as an expense, we’re actually dealing with an investment.
Making, implementing, and continuing a marketing campaign is comparable to the laws of sowing and reaping:
- We reap what we sow.
- Reaping happens after sowing.
- We reap more than we sow.
So if we market, we’re going to sow good seeds, if you will. Those good seeds should become viable products. When customers purchase our products, we reap our marketing rewards. And that’s WHY having a marketing campaign system is important.
Why Marketing Matters to the Sale of Our Business
Simply put, we market to generate sales. We spend advertising dollars to bring people into our business to buy our product or service. That produces revenue. If we’ve set good profit margins, we’ll reap the money we’ve sown times two, or three, or four. Theoretically, if we spend $50,000, we could earn $100,000. But we can’t earn it if we don’t invest it.
Don’t just invest the money and walk away, though. Don’t quit. Marketing is not a magic pill. Just because you spend $1,000 in January doesn’t mean you’re going to make $5,000 in February. Marketing is a continual tool that keeps business coming in your door. It can also bring buyers to your door.
In Episode #12, we talked about how keeping clear financial reports appeals to business buyers. Keeping a clear record of your marketing strategies and results works the same way. If you keep detailed records of your marketing campaign plan, you can track quantifiable results. Quantifiable results add validity to your business’s systems. Strong systems make you, as an owner, less needed which makes your company more valuable to a buyer.
What Comes Next?
Everything we’ve been talking about in this series now ties together. This article finalizes how to build and grow value in your business. We’ve reached the half-way point, folks. But don’t give up now. We’re about to get to where we’ve been going! The next article gets us into the importance of your exit plan. We’ve put in the hard work and long hours to make our company sellable, so let’s sell it.
Like I always say, life is hard. Business can be complicated. Money doesn’t have to be. Let’s continue to make our lives, at least, financially simple.