Achieving Small Business Profits

Achieving profits for your small business takes more than just great marketing or more than just great advertising. A great marketing or advertising campaign will not automatically deliver profits for your small business.

In over two decades of working with small business owners on their marketing, the most frequent misconception out there is that a great marketing campaign leads to great small business profits.

Achieving small business profits requires a sound business structure. That means providing a product or service that people are willing and able to pay money to acquire PLUS the ability to service customers/clients after the sale.

If you’ve established a sound business structure, then an effective advertising or marketing campaign will be the answer to your prayers. Your business will grow, your profits will escalate and all will be right with the world - assuming you’ve already got a sound business model in place.

If you’ve got a great BUSINESS MODEL in place, then an effective advertising or marketing campaign will ensure great profits for your small business. However, a great marketing campaign will definitely find any “leaks” you have in your current business model.

For example, an effective advertising campaign will act like the air pump pumping air into a pool toy. If the pool toy is “sound”, it will hold air and expand. However, if there’s a major tear in a seam, the pump won’t be able to inflate the toy at all.

That’s how an effective advertising campaign works with a business that isn’t operating with a sound business model.

In an article in Entrepreneur Magazine reported on a list created by serial entrepreneur John Osher of the 16 mistakes start up businesses make.

According to Osher, the number one reason for small business failure is not lack of funding, not lack of talent but rather that the initial concept isn’t sound.

Osher speculates that entrepreneurs want to be in business for themselves so badly that they fail to thoroughly investigate the plausibility of their business offering. They tend to view the business from their side of the equation instead of viewing the business from the prospective customer’s side of the equation.

Before you begin working on advertising your small business, first take a look at your business model.

  1. Do you already have customers?
  2. Are those customers coming back to do business with you again?
  3. Are existing customers referring other new customers to your business?

If you answered “no” to the first question, then you’re definitely not in any position to launch any kind of marketing or advertising campaign. Find a few “guinea pig” customers to experiment upon before you issue invitations to the general public.

If you answered “yes” to the first question, but “no” to the subsequent two questions, then you must first diagnose where the “leaks” are in your business model.

Once you can answer a resounding “yes” to all three questions above, THEN you are ready to embark upon a marketing/ advertising campaign.

Posted by Kathy | Filed Under Business Basics, Small Business Profits 

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