Marketing Your Small Business Effectively

Marketing your business is a very important part of earning new clientele and keeping your current customers. While marketing seems like an easy step in every business plan, many people squander their marketing money by hitting the wrong targets. Not all marketing plans are created equally, and the details of your marketing plan should stem from your current relationship with your customers and your target client base.

What is marketing?

Marketing is the act of promoting your business in a way that positively reflects your products or services. Marketing is an important part of every business venture because it encourages people to use your business. While many are satisfied with their client base, reaching new clientele is the best way to grow your business without making changes to your financing strategy and revenue channels. Marketing is a robust tool, and many people market their businesses differently.

Ways to market your business

There are multiple ways to market your business because there are many platforms by which you can promote your business. Advertising using radio, television, mail and social media are all viable forms of marketing, however marketing and advertising are not the same thing. Advertising is promoting your business through one medium. Marketing is the sum of all advertising and non-advertising channels your business utilizes to promote its business. Certain forms of marketing are very cheap and nearly every business uses them. These are social media and blogs or websites.

Businesses often use social media today to promote their business. The main objective of a social media account should be to direct people towards your business’ website/blog. The website or blog is a focused advertising tool that can be used to inform your clientele about your business and create a relationship with them. Websites are more expensive than social media because a domain name costs money and sometimes professional assistance is required to maintain and update a website.

Advertisement based forms of marketing tend to cost more money, but can be used to reach a different client base. Most marketing is achieved through multiple streams of advertisement, such as radio commercials and ads in the local paper. Keep in mind that marketing is not the same thing as advertising. That being said, you can market your business relatively well without using traditional advertisements. As such, any form of positive interaction with potential clientele can be used to grow your business. This can be achieved by offering workshops at your business, attending charity events as a business entity and asking customers for feedback about your business and the products/services you offer.

Target marketing

Although every marketing opportunity can create new customers for your business, small businesses should focus on using the marketing methods that promise to create the most new customers and encourage repeat business. Using every marketing method is not an efficient use of your marketing budget because different marketing methods will not necessarily produce significant new clientele. Rather, your business should use a targeted approach to marketing to maximize the amount of new customers reached. Remember, money and resources spent on marketing are worthy investments only if they generate new customers.

Target marketing seeks to find the best forms of marketing for your business’ potential clientele and implementing a plan that targets that client base. The idea of target marketing originates from the idea of consumer-centric marketing. This means you advertise the product in a way that’s appealing to potential consumers, not everyone under the sun. Target marketing requires that the business owner knows the target clientele. Sometimes market research must be performed to determine this aspect of your business. Defining a target clientele can be different from business to business. This normally requires defining a certain age range for your target clientele. For example, a certain business might determine that its target clientele are customers aged 30-37 years old.

After defining your target clientele, you can implement a specific marketing plan to reach this group of customers. Marketing to different age categories is done by taking into account the best way to reach these particular customers. For example, teenagers are more easily accessible through social media than senior citizens. A targeted marketing strategy should take into account the best marketing methods to reach your clientele.

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Options for Start-up Funds

Having the passion, drive and plan to start a small business is the easy part, having the funds to start and continue running your business holds back many entrepreneurs from their dream to be business owners.

So where will these funds come from? Here are a few options to get your business off the ground.

Self-Funding – Tapping into your personal savings, investment accounts, or even securing a second home loan to drum up some capital on your own to start. A big advantage of self-funding is that you have complete control over your business and won’t be held liable.

Individual Investors – Venture capitalists and angel investors fund your start-up out of self-interest, giving you money upfront in exchange for a higher return when your business is established. The advantage of individual investors is you are guaranteed the sum you need to start-up. A disadvantage is you might have to give up a percentage of your ownership of the business.

Small Business Loans – Small business loans are fairly common and easy to find in your area with a quick search on Google. The process to get a small business loan is relatively simple, but you have to be aware of the stipulations. The interest can be significantly high and your personal credit has to be in good standing.

Line of Credit – You can open a line of credit with most banks and financial institutions. Without a business plan, expect a low credit limit and high interest rates. The more established your business becomes, the better the terms of your credit will become.

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Debit vs. Credit – Fees, funds and customer preference

Being a business owner, you want to have the most convenient options available for your customers, a big one being payment. Debit and credit purchases have outranked cash purchases and the only way to stay ahead of the game is to offer debit/credit.

When deciding whether to let customers use debit, credit or both to make a purchase, it’s important to consider the fees associated, availability of funds and what your customers might prefer.

Fees – The fees for credit transactions tend to usually be more then the fees for debit transactions. Credit card purchases charge a fee that is a percentage of the total purchase, where as the fee for debit transactions is a fixed rate. Typically it is cheaper for small business to process debit transactions.

Funds – When customers use credit, funds can take one business day if not longer before it becomes available in your merchant account, where as debit transactions is immediately debited from the customer’s bank account and deposited into your merchant account.

Customer Preference – The key to more revenue is keeping your customers satisfied. When deciding whether to accept credit or debit as payment, one of the most important factors to consider is your customer preference. Make your decision based on what will generate more transactions.

So, should your small business accept credit cards, debit cards or both?

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New Year’s Resolutions for Your Small Business

New Year’s resolutions are not just for your personal life, you should also create resolutions for your small business. So, if you’re ready to bring some positive change into 2016, here are a few resolutions to consider.

Learn to manage your cash flow more efficiently – This is a great resolution for business owners who don’t have enough capital to invest back into their business, or those who don’t understand everyday business finances.

Improve your social and web presence – If you haven’t updated your social media platforms or website in the past year or have been putting it off, it’s time to get at it! Building online presence for your business will attract customers and increase your sales.

Charge what you are worth – If you’re feeling underpaid and undervalued, take time to revamp your strategy and up your rates to accommodate the value your business brings to the table.

Build your team and delegate – If you have more work then you can handle, it’s time to stop picking up all the slack and start bringing in others to help you grow your business and learn how to delegate more effectively.

Become a better communicator – If you are having frequent issues with misunderstanding and consistently repeating yourself, it’s a sign that you’re communicating ineffectively. Set a resolution to focus on becoming a better communicator in your business.

Now that you have some ideas for your business’ New Year’s resolution, it’s time to narrow them down, create a plan and put them into action!

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Turning a Hobby into a Business

Here are a few steps to help you turn your hobby into a profitable business;

  1. Hobbies are a great way to take a break from your busy work days, however turning it into a business can change the focus to financial necessity making your hobby less enjoyable. Take time to assess what it would be like to use your hobby as a way to pay bills and decide if you want to put your hobby in a ‘must do’ position.
  1. Your friends and family may love your crafty homemade products but you have to ask yourself, and them, if it’s worth paying money for. Do some market research on what you are offering and decided if it is worth it and if it is professional quality.
  1. Starting your business part-time is a great way to help you decide whether it is worth perusing full-time or not and gives you a chance to work out all of the kinks before you are fully committed. Take a test drive.
  1. Once you have decided to commit to turning your hobby into a business, create a business plan that summarizes your product or service and outlines goals you want to achieve. This is an important part of the planning process and should not be skipped over.
  1. The secret to success with a small business, besides a great product or service, is marketing. Make marketing activities part of your everyday business operations to attract customers and create a strong name for your business.

Remember if you fail to plan, you plan to fail.

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Estimating Cash Flow

At this time of year we often reflect on the past year. We’ve taken our most popular blog and reposted it, enjoy!

In the planning stages of your small business, one of the most important things to do is estimate your cash flow and create a plan to make these goals a reality.

But how do you make sense of a cash flow forecast? You may have done your research and estimated your monthly expenses, but are not sure how to organize this on paper or present it to others.

You are not alone! Many individuals are unsure how to organize their cash flow, or may simply need a guide to follow.

Luckily, there are a number of tools available to help new and existing entrepreneurs create their cash flow forecasts and statements.

1.       Cash Flow Section of a Business Plan

As mentioned in previous posts, there are many business plan templates available online whether through banks or organizations like Canada Business Ontario (CBO). If you require guidance, simply use the cash flow section of a business plan template to help you through this process.

2.       Cash Flow Templates

There are also specific templates available online to complete your cash flow forecast or statement. Although they may be similar to the ones in the business plan templates, some are different. For example, Microsoft Word has cash flow (and many other small business) templates available for download, so you can easily input your cash flow information into Microsoft Word.

3.       Small Business Software

You may wish to purchase a computer software program to complete your small business work and cash flow forecast and statements. If you feel that you would rather not use a computer, copy the information and handwrite if necessary or desired.

A few resources to help you begin your cash flow include:

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Factors to Consider Before Starting a Business

Starting a business can give you the opportunity to work on a project that inspires you and earn money at it. Despite this, the reality of starting a business is often idealized. Here are a few factors to consider before opening a business.

Time

Starting a business is very time consuming. Normally new business owners will work more than 40 hours a week to get their business established. This means working weekends and late nights. Another difficulty with opening a business is that there is little pressure to go to work. Owning a small business means being your own boss, which is often a problem for people who aren’t motivated or independent.

Money

Starting a business can be expensive. Therefore, financing a business can be a big financial hurdle. Often people use their personal savings to start a business; however this can strain personal relationships if your significant other does not approve of your business. It’s also possible that your business will not be very profitable for a few years following its establishment. This can mean living on a small salary for an indeterminate amount of time. Your salary reflects the success of the business, and most of the time new businesses aren’t immediately successful. An alternative to starting a business that is more suitable for people looking to earn a respectable salary from the beginning is buying a franchise. This does not subvert the need for capital but does accelerate the process of establishing a successful business.   Also, if you are not the type of person who is comfortable securing funds from investors or banks, starting a new business is not for you.

Family 

Long hours at work can reduce the amount of time you spend with family and friends. This can be manageable for certain people, however opening a business can strain your personal relationships. In addition, money troubles can bridge a gap between you and friends who have invested in your business. Consider avoiding taking money from friends and family, even as investors, to compartmentalize important aspects of your life.

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