Don't Waste Money When You Promote Your Small Business

A memo to managers of small businesses. If you promote your business, you must measure the results. If you can't measure the results, don't waste your money promoting your business.

Successful business people always work out the return that they will get from hiring a new person, buying a new piece of equipment or machinery, moving to new premises etc. They look at the Return On Investment. If the return doesn't justify the expenditure, they normally don't go ahead with the purchase.

Promoting your business is no different.

If you are spending money in business, you need to know what the return is so that you can measure whether or not it is worthwhile. For example if you are spending $580 a week on promotions, you need to know how much profit is generated as a direct result.

Every dollar you spend on promoting your business should bring in a measurable return. A good rule of thumb is to look to achieve a five fold return. So for every dollar you spend you should get $5 back in sales.

Too many people blindly go ahead and advertise and have no idea whether or not the investment in the advertisement is having any return whatsoever to the business. From a business point of view, this is obviously not a profitable practice.

Many business people seem to be sold on the idea of, "Getting their name out there." Of course, this is reinforced by the people selling advertising who know a lot about selling and not too much about advertising.

They urge you to follow the concept, "Market by advertising to get your name out there, so that people will be familiar with your name when you come to sell your products and services." Then they bring fear into the situation by saying things like, "All your competition are out there and unless you do the same, you will get left behind."

Just notice how hard they promote a concept where the results cannot be measured.

And off go the business owners, to promote their company with image advertising that proclaims to the world how great they are. They hope, and they pray that some way, the message about their brand will stick in people's minds. Never knowing if it does, or if it doesn't. Or whether their promotional dollars are paying them back in increased sales.

Some people even think that a clever slogan is enough to get their phones to start ringing. This all too common approach, is a huge waste of time, and money. However, every single advertising salesperson will pressure you to adopt this approach because their objective is to sell advertising space not to build your business.

You lie awake at 3 am wondering if you made the right decision to buy the promotion campaign. The salesperson will be fast asleep with a little smile on their lips as they dream of their winter holiday funded by their commission on your expenditure.

Promotion must do much more than just get your name out there. It must educate, qualify, convince, persuade and above all start the sales process.

Think of it as a sales presentation that's geared toward accomplishing a carefully defined objective, whether that objective is the actual sale, or a step toward it.

Peter L Mitchell is a business consultant who has helped many diverse businesses to increase their profits. He has a wealth of practical experience which he is willing to share freely.

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