Happy Wednesday. You know, I am typically not much for working out in the evening – I prefer reading and drinking wine – but it does help me sleep much better. Still a little sore from last night’s routine, but I slept like a rock!
Kubae and I were talking this morning about a restaurant that started and died a few blocks away. It lasted about 2 months before the doors were closed. she wondered what they might have been thinking and what lessons we could learn from this.
I think there are several important lessons for anyone starting a business in this story.
First, the old adage, “If you build it, they will come” is no longer valid. I am not certain there ever was a time you could open business and customers would flock to your doors, but it definitely won’t work today. Today, your potential customers have a huge array of choices so a small business owner must find a way to get to “top of mind”. This means marketing.
Second, as I discussed in a prior post, the saying, “Location, location, location” is extremely important for certain types of small businesses, especially restaurants. In this instance, this restaurant might have had the best Chinese cuisine in the Pacific Northwest. It wouldn’t matter as it was sandwiched between two other restaurants and on a side street.
Third, whatever you think is the bare minimum you can spend to get the word out, triple it. That’s right, plan on spending 3 times as much on marketing than you originally anticipated. Your potential customers are bombarded with thousands of choices a day and your small business competes with those other messages. Whether you choose to spend money or time, a conservative approach is to plan for more messaging. A lot more.
Fourth, when in doubt, spend more on marketing. A good friend of mine, Mike Leitch of VSource Systems, used to joke that the biggest problem he would like to see is having more work than he has time to do it. With a growing business you can hire to handle the extra work; but if your business never gets going, you will be hard pressed to pay yourself.
Fifth, change your marketing channels. The first thing you need to do is ask yourself how anyone is going to find out about you. If you are a restaurant, you need to find out how to get listed on Yelp and Google Maps and any of the other dozen websites that cater to restaurant reviews. If you are an accounting business you will need to find out how your potential customers look for new accountants. And then, ask yourself, what other ways can I get the word out. Experiment with channels, track their effectiveness and if after a few months it isn’t working, discard it for now and try something else.
Starting a business is risky. If you are ready to take the plunge, then I strongly suggest you create a marketing plan to help you build excitement about your Company. And if you are looking to expand your business, I strongly suggest you create a marketing plan to help you build excitement about your Company. Getting more potential customers than you have time to work on is a great problem to have.
If starting a business is in your future, I encourage you to reach out to your accounting professional and create a business plan and budget to help you get through the first 3 years. If you are looking for an accountant who can help you plan your startup or would like another opinion, feel free to contact me for your free no obligation consultation and lets see what we can do to help make your dream come true.
Have an awesome Wednesday.
Accounting Clarity 