To match your product to the market’s needs profitably is the remit of marketing. Some would consider Sales to be part of marketing but I will treat it separately here.
Underlying all marketing is the brand. The brand is your identity and helps to convey your offer, your value and your ethos to the market place. The brand must be appropriate to the market and the product; it is the link that bridges your product and your market place.
There may be good reasons to have more than one brand. Each of the seven Ps below pertains to a particular brand and will probably be different from other of your brands.
The practice of Marketing can be broken down into seven items:
• Physical evidence.
Your people, you, must live the brand identity. There are few more visible exponents of this than Richard Branson.
The personification of Brand is a useful concept. When your potential clients call or visit you what type of person do they expect to find? What has your marketing message said?
What do people have to do to buy from you? How do they place an order, how do they pay, is it easy to see the options and make sure they select what they need?
Does the process resonate or clash with your brand values?
This covers the additional material that accompanies your product or service. Your paperwork – quotations, invoices, statements and so on – do they support the brand? Do they look like they would come from a business like yours?
The product (or service) has to match the brand. Remember the maxim “under promise and over deliver”. Make sure the client is not disappointed by ensuring clear marketing communications regarding specifications, costs, commissioning work and so on.
This is the standard price. Any special offers come under promotion.
Bearing in mind your brand, is your pricing commensurate?
Are you offering a Mini at a Rolls Royce price or vice versa? Neither will work.
There is a strong argument that price denotes quality. In any case you do not want to get involved in a price war with the incumbents in your market. They have more market knowledge and probably deeper pockets.
Are you on-line, telephone or premises based order taking? What is the distribution channel for your product? How do people place the order? Does it support your brand values?
Promotion incorporates all the things you do to make people more willing to buy.
It comprises advertising, public relations, sales promotions, packaging and direct selling.
A business start up is not likely to have sufficient funds to advertise to a broad market. You are not going to win an advertising war with Proctor & Gamble. However carefully segmented markets can be approached through speciality press, from the Parish Newsletter to Beekeeping magazine.
Public Relations (PR) is good for name recognition and brand building. To have news reports of you, your company and your activities is powerful. You should consider planning and doing things purely for PR.
Sales promotions include all those special offers. Discounts, two for one and so on all encourage clients to buy if they have a need of your product and know about you.
Packaging is an important, and fairly low cost, communication channel. Make sure the packaging supports the brand values. When you buy jewellery or an expensive watch they don’t drop it into a plastic carrier bag!
Direct selling includes customer support, accounts and so on.
Your product needs to be sold
The world is awash with people who set up a business, bought stock, set up shop and waited for the customers to roll in. Frankly that doesn’t happen.
You have to become an expert salesperson or hire someone to do it for you.
Your marketing has to make the potential client aware of your offer, make them interested enough to see you and listen to what you say (your pitch).
Can you talk confidently to a potential client? Do you understand the client’s pain that your product will remove? Can you persuade or demonstrate how your product does that?
You need to listen to buying signals from the prospective client. Questions like how much, when can you deliver, what colour, can you… and so indicate the person is ready to be closed.
A close is a statement or question that moves the prospective client along the path to buying.
If I stop writing about closing will you read on and research closing later?
A business is another spouse
In a start-up business you have to do everything. Sixty to eighty hours a week is not unusual, weekend working normal and holidays become long weekends if you are lucky.
Your family will have to support you. The stresses of business start-ups are exceptional. Your personal relationships either help or hinder. Make sure your family will support you in the long hours when you will be missing tapping away at emails at 9pm on a Saturday night.
Two in three start-ups fail
Statistics show that two in three start-ups fail. The reasons are various but usually involve a lack of sales. A secondary reason is trading at a loss. A strong understanding of the cost of sales and overhead costs is essential.
Aside from the failures there are the struggling start-ups; businesses that do not generate enough cash to grow, to invest in marketing and so on.
You have to manage the costs and sales for success.
Sources of finance
Many businesses are funded by redundancy payments. When this runs out bank loans, social funding and friends and family are all sources of finance.
Some people take jobs to pay the bills for their business but then lack the time to invest in their business.
You have to manage your cash to succeed.
The best way to start a business is to start with a client. If you can develop a client base while you are still working you save a big investment of time and money.
Achieving sales success is vital to a living business.
Be very careful about borrowing. Banks will lend to you if you guarantee the loan in some way, in other words if you are creditworthy. Their business is making money on their deposits.
Whatever you borrow has to produce a greater positive income than the repayment schedule.
Finally, starting a small business is exhilarating! Those of us who have worked in large organizations, to a degree shielded from both clients and delivery, find the challenges exciting.
Overcoming the challenges is character building. Living outside your comfort zone is extraordinary. The knowledge, that success or failure is down to you and your efforts, is empowering.
You never know you may even make some money.
Motivation Matters run public courses on the business of starting a business.
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