Mistake No.2

Not Allocating Any Money For Marketing

Not putting aside a budget for marketing is a grave mistake which many businesses make. Usually this is because business owners haven’t quite grasped the benefits of marketing, and somehow believes that their business will survive by shear WOM (Word of Mouth) or luck. Of course WOM is an extremely effective way of drawing attention to your business, but it wouldn’t be possible if no one even knows your business exists! Even businesses which already have existing customers need to spend on marketing in order to draw in more customers as well as keeping competition out of their way.

Think of your business like a brand new shiny car sitting out there on your driveway. Doesn’t it look great? So where would you like to go in your car? Certainly, if you want it to go forward, you’ll need to put some petrol or diesel into it. Indeed, it doesn’t matter how good your car is, unless it is moving forward you’ll never get the full value from it.

Now let’s liken that to your business. The petrol or diesel is your marketing, because without it your business will be going nowhere fast. So why is it, that so many small business owners simply do not have a budget allocated for marketing? How can they hope to drive their business without a marketing budget? The truth is that many small business owners have picked at a bit of advertising, perhaps tried sending out some glossy brochures only to find that they received little or nothing back from it, leaving them feeling despondent, annoyed at losing the money they spent and of course frustrated at not knowing how to get it right.

If you want your business to be successful, you need to allocate a marketing budget and spend it wisely. Which leads us nicely onto the next biggest mistake made by small business owners.

- Keith Banfield

Mistake No.1

Not Knowing Who Your Customers Really Are

Any marketer would know that knowing who your customers are is essential to your success in business. Besides the obvious demographic information (age, sex, geographic location), you need to know very specifically what characteristics make your customer. In another words, what interests your customers so that you know exactly what will grab their attention.

Whatever business you are running, it is essential to know who your customers are. Amazingly, one of the biggest mistakes made by small business owners is to not know who their customers specifically are. For example, if you were to ask the question, “who would you like as a customer?” Sadly, the all too common response is, “well anyone will do”.

So what do your customers look like? How old are they? What business are they in? Where are they geographically? Are they male or female? In other words, how could you specifically define who you are trying to attract as a potential customer?

- Keith Banfield

Most small business are built on the same business model and hence have the same profit drivers. when thinking about small business strategy, small businesses all have certain key similarities.

• customers
• goods/services
• cost of goods/services

Before thinking about strategies to attract more customers customers we need to understand the two main drivers which leads to a customer.

1. how many people know about your business and the good/services that you provide?
2. how many of them can you attract to become your customers?

Once a small business has acquired a customers, the obvious next step is how much money do we make from this customer. To understand this we need to understand the two drivers of revenue or gross income.

1. how much does the good/services sell for?
2. how many good/services does the customer buy?

Another way of seeing this is:

1. how much value in a basket of good/services?
2. how many times does the customer purchase in a given period?

In short, to find out how much revenue is generated per customer we need to know how much and how many.

Lastly, once a small business finds out how much revenue each customer is bringing for the business they need to understand their cost of acquiring the customer, goods/services. The driver for this is:

1. Profit Margin

Obviously the higher the better, but businesses in certain industry group or businesses that sell certain type of goods/services will tend to have different margin. auto-manufacturers have lower margins compared to online business selling ebooks.

Summary
The five key drivers to small business profits are:

1. Leads
2. Conversion
3. Revenue per Transaction
4. Number of Transactions
5. Profit Margins

To find out more about the 5 key drivers of a business and strategies to improve each areas go download your 5 Free Gifts and you will discover the following:

• Discover five effective ways for expanding your business
• How business coaching can increase your turnover and help you achieve business success
• Learn the secret to creating serious cash flow and leveraging time and money
• Master the technique of franchising and handling a growing business
• Become a successful entrepreneur with credible marketing and sales skills.