Small business owners often struggle with spending after the initial investment which is often more than they imagined. Once that initial spending tapers off it’s time to come to grips with the cost of operating the business. After a certain breaking point, the owner decides to start cutting back and watching every dime. That comfort level depends on whether there’s stead business and whatever bank balance helps them sleep at night.
There’s only one problem with this thinking. Ted Coine wrote an eloquent piece on this very issue which he reposted today, titled “Not in Your Budget, Change Your Budget.” The question is not whether to spend, it’s whether you are spending money to make money. If you hesitate to spend money promoting your business, no one will know you exist.
I find this objection to spending money on marketing. The tricky thing is that a business owner will jump at the first Groupon salesperson and willingly give away part of his revenue. But if you talk about spending money on strategic marketing, they start to talk about ROI and whether it’s worth their time. One of the commentors on Ted’s post said it best: “With no I, there’s no R.”
The really sad part of this practice is that I see it more with companies who have been in business for a while. The good news is that if they applied strategy, the money they are spending now could actually bring in more revenue and they would likely spend less when it’s all over. Talk about ROI… this is it.
If you have a plan for your marketing you already know what your budget looks like and how your spend is going to bring you revenue. Even if you have to shift your budget, it will still be done as part of a larger plan and not some random event that may or may not bring in customers. Ted’s friend Gene got it spot on: “If it isn’t in the budget and it will help you make more money, change the budget!”