Why Small Business Owners and Entrepreneurs Really Need A Solid Marketing Plan?

When I ask entrepreneurs and small business owners, it is not unusual for not having any marketing plan. I once read that Sir Richard Branson never had any marketing plan when he started the 1st Virgin business many years ago. In fact in one study of entrepreneurship (I couldn’t recall the name of the study) was that as much as 50% of entrepreneurs and business owners don’t have a business plan and marketing plan when they first started the business.

What was the outcome? As much as 90% businesses started by entrepreneurs and small business went busted or failed within a year. I experienced one of the many busts few years ago (with my cafe business) because i don’t really have a proper and “the few solid sheets” called a marketing plan.

Coming back to my questions to entrepreneurs and small business owners, many of their answers sounded like this, “I don’t really have one”, “It’s in my head coz I know the business so well” and worse, “I don’t know what is marketing plan”! If you happen to be in one of these categories, rest assured you are not the only one. And to perfectly honest, that’s the ultimate reason why I turned back to my writing board where I was actually in the middle of writing (rather perfecting!) a personal development programs. I dropped that program and quickly drafted and started Marketing Plan Breakthrough S6PEC because many of you need it, seriously.

But, I don’t specifically mean my own Marketing Plan S6PEC Framework because there are so many versions and gurus out there that can give you the benefit of marketing plan. Of course I am going to say mine is a lot better because it’s a practical and practitioner’s guide. Other than being a consultant, I also have performed marketing manager role, entrepreneur role, business manager role, investor and student of entrepreneurship (during my MBA!). But that’s not my main point. My main point is for you to have a marketing plan to guide your business. Which one? Well it is up to you!

So, to put things in perspective; why do you really need a marketing plan?

Guide
– in a marketing you will think, record and document all your ideas, products and services offering, price, distribution channel, programs, sales direction, customer segment and so on. I have experienced whereby I suddenly realized that my business is not going on the right direction because I didn’t follow my marketing plan. Have you experienced that? Or perhaps you suddenly realized that the thing you do know supposed to be done many months ago because you forgot about it? And you forgot because you don’t jot it down and plan for it? This is what I mean that marketing plan as a guide. I cover this in my Marketing Plan Breakthrough S6PEC.

Ideas
– people said the more you talk about your ideas the more refine it becomes. I think this is true. Did you ever experience when you talk to more people you generated a lot more ideas? When people give you feedback it triggers another dimension of your ideas? If you are, so where do you keep all these ideas? It should be in a marketing plan.

Resource Plan
– in marketing, there is only one thing that’s scarce: RESOURCES. Some people have a lot of money but lacked ideas and another group is the other extreme; more ideas and less money. Many of us probably the later than the former! In the marketing plan we will tackle things like people to hire, pricing, distribution plan, sales programs budget and so on.

Strategy
– similar to business strategy, marketing plan will capture strategies required to support your business strategy. For example if your business goal is to achieve 20% increase in sales, your marketing strategy would be to 1) introduce new product, 2) increase price for premium offerings, 3) recruit more distributors and offer commission scheme and so on. Strategy is king. When you can see your business in totality, I can assure you that you will find it easier to manoeuvre. Marketing plan is the place to address all these issues.

Risk
– in our marketing plan we shouldn’t only concern about making money or positive points, we also should address the risk we are taking. for example it is common for a marketing plan to capture things like, “require additional staff to handle sales call”, “additional investment from the management budget will increase chances of increasing 10% sales target” and many more. Imagine if you can factor your risk earlier and think through it, wouldn’t it be better for you?

Pricing
– I once said in my Marketing Plan Breakthrough S6PEC that, “Price is the key determinants of your profits”. I stand firm to keep it that way. In your marketing plan, you will address pricing plan for your distributors, customers, multiple segments (some business charge differently – price discrimination) and cost price i.e. your raw materials and things like that. Not many address price correctly and bear in my mind that we need to standby few pricing plan to respond to the market. Take for example during festive season, if everyone is lowering price and slashed their price or even ignited a price war, what do you do about that? Follow suit or wait? If you want to follow, how far? If you want to wait, how long? You capture all this in pricing plan.

Customer Segment
– this is talked about most of the time, but let’s accept the fact that today’s customers are fragmented to smaller niches. Your product and service will not be consumed by only one segment and at critical mass. it is likely to be consumed by smaller segment and multi. No more critical mass, but rather a solid spread of niches. For example, who buys iPod’s today? If Apple only think about yuppies they are making a big mistake because apparently iPod is also used by women and people with active lifestyle. Another example, who buys from hypermarket? If hypermarket only focuses on households they may not survive or be successful like today. Hypermarket main segment is actually small business restaurant operators that buy in larger quantity compare to households and on daily basis. I’ve been there, I know! LOL

Corrective Plan
– a marketing plan is a living document. Trust me, the moment you have it and experience planning your marketing, you will realize this. Therefore it is a plan that allows you to assess past strategies and results and at the same time allow you to make necessary corrective measures to fit your business growth. for example, who expected the 2008 financial crisis to hit us so badly? No one other than the few so called “economists” but how did responded to it? Severely. Many businesses closed including many giants. But the good thing is, many have a solid marketing and business plans, therefore they make quick corrective actions and moved forward.

Innovation
– I once sat in a meeting of project and business updates and suddenly one of the directors said, actually with all that we have now we can be in the medical device market. Violaaa!!! This medical device company used to service government hospitals and they have all the equipments. It’s just that they never thought of going direct to the hospitals and take the lion share of the business. In that meeting, after going through the company yearly updates, this “innovation” came instantaneously and the next year they are pitching about it to the government hospitals directly.

Imagine if you can do all these and manage all these in a marketing plan? Systematic, organized, well thought, innovative and captured all your pertinent business information, don’t you find having a marketing plan is useful for your business?

One thing about my business, I don’t sell templates. I only sell REAL content. I believe that template is only to give you the general overview of direction but not how-to do it. That’s why I highly not recommended you choose to download or purchase marketing templates because I have seen them i personally think it won’t help you much. Let me share you a recent story about template.

I have childhood friend who wanted to open a small business. I offered him my service at $$$ which is so much below market rate because we have been friends for 20 years. He said no, because he thinks there is another cheaper way to do it or in other words “resourceful is my middle name” kinda thing. So I let him do that. I offered him five days later that, if he needs me to view the marketing plan I will do it for free over tea. He showed me a marketing template he bought for USD 25 and all he got was a template!!! I scolded him and cursed the site that provided such thing. It was just boxes everywhere and not even a paragraph on how to fill those boxes. Well, this is what I mean and I defy being in that business because that’s cheating. By the way i got to do my friend’s job after that.:)

What I offered is much simpler, richer and with all the things you need. Firstly, my blog is to help you enhance and as a source to guide you on the marketing plan you purchase. Well, let’s don’t talk about purchase yet.

Would you want to view the actual content or maybe download the Marketing Plan Breakthrough S6PEC Introduction first? Please send your inquiry to [email protected] Information is FREE. Otherwise please go to http://www.marketingplanbook.com

How to Prepare An Easy Marketing Plan for Your Small Business

As a small business owner, I imagine you would not have the time to prepare a detailed marketing plan. Some business owners might not have a plan at all. However, I personally think a marketing plan is necessary for the success of your business. But, you do not need a 10-pages-or-more plan. I always develop a plan with no more than 3 pages that highlights major key points. On a marketing strategy level, Tim Berry has suggested a framework of “thinking” on how to develop a marketing plan. Those steps are basic and not difficult. His suggestions should act like a guideline for you to start with. He encouraged you to think about what you want to achieve, your strengths and weaknesses, your unique offerings, your target markets, and how you want people to perceive about your brand.

To make it simple, I would also like to suggest that you incorporate your promotion plan in a marketing plan. This way, you will have everything you need in one place for the whole year. Jeff Williams provided a short list of what you need for promotions in his article – How to create a powerful promotional plan for your 50+ business.

Let’s put all of them into easy-to-develop steps, shall we? In your marketing plan, you might want to split into two main sections: an overall marketing plan and a promotion plan.

Section 1: Marketing Plan. You should at least have the following items in a plan.

  • Marketing Objectives: What do you want to achieve this year? It could be… To generate $ in revenue or To gain 10% market share.
  • Unique Selling Proposition: What make your offerings different from your competitors? Lower cost? Better distribution channels? Price? Products?
  • Target Markets: Please be clear about your target markets. You do not have a lot of resources to invest in mass market.
  • Communication Channels: Your target markets should determine how you plan to communicate with them. It will save you a lot of money if you are clear about who your customers are.
  • Budget: Many businesses determine their marketing budget as a percentage of the total revenue for a year. Alternatively, you might want to set a “ceiling” that your marketing spends would not be higher than $$$$.

Section 2: Promotion Plan. To prepare a promotion plan, you need to understand your business cycle or season. Basically, you need to know when to spend money to boost sales and when to save the money. If you own a restaurant, for example, you might want to spend the marketing money during slow periods e.g. in February or May. What you need in your plan can be as simple as a spreadsheet with the following fields:

  1. Month
  2. Launch date
  3. Promotion: e.g. buy 1 get 1 free
  4. Points of Difference: why should your customers be excited?
  5. Target Group
  6. Communication channels: this is very important. You could have the best promotion in the world but it would do nothing for you if your communication channels are ineffective.
  7. Promotion Budget
  8. Results: e.g. sales volume
  9. Return on Investment (ROI): [(sales volume-cost of promotion)/cost of promotion]. If your ROI is lower than bank saving interest rates, you should rethink about your promotions because it’s easier to get the same return by simply depositing the money in the bank!

Please trust me that if you could list all promotions you need for a year, you would feel so good! It creates confidence, it makes you think, and it helps you identify potential opportunities in advance. Ultimately, it helps you to be ahead of the game. Please also understand that this is an ongoing process. You will need to visit your plan to update it every now and then. Most importantly, you will need to track the results for two reasons: 1) if a promotion fails, you want to learn from it, and 2) if it is successful, you want to replicate it.

So, it’s not too hard, isn’t it? I believe many small business owners would already have a marketing plan in place. However, for those who don’t, why not start preparing it now.

A Simplified and Savvy Marketing Plan That Works! Really

Time to create your marketing plan. Bleh, you say.

Just the words, marketing plan, sound so dry and conjure images of lengthy word documents, online research, and possibly some sort of matrix.

Completely understandable. But, what if there is a different way?

What if we take that complex process, boil it down, and only use what small business owners truly need? The single most important elements and a workable plan. That doesn’t sound so bad. Because, really, once we take out all the mumbo jumbo, we’re left with four parts:

1. Evaluate Existing Foundation

2. Know Your Target Audience Precisely

3. Create A Workable Plan

4. Measure Everything

Evaluate Existing Foundation

In order for any amount of marketing, advertising, or public relations to work, the marketing foundation must be solid. Your marketing foundation includes: logo, tagline, Unique Selling Proposition (USP), and customer service. If your company has been in business for more than a year, you have your logo and your tagline. If it is solid, let’s not tinker with it. We are not on a rebranding mission. But, the other elements, the USP, and your customer service…let’s talk.

1. Unique Selling Proposition – Ah yes, the USP. When used effectively, it’s a beautiful thing. The USP is a concise statement that bundles the top reasons why people should buy from you. It should be brief, it should be distinctive, and it should be yours – no copy-cats allowed. If you already have a fantastic USP, great! It should be included in every business material your business puts out into the world, even your invoice. If you do not have a solid, compelling USP, start talking to people. Find out from your customers why they do business with you, ask your friends, get feedback, and write a single sentence that is packed with conviction.

2. Customer Service – Customer service is an essential element of the marketing foundation. If you make a guarantee in your USP, be sure to follow though with your customer service. “We answer the phone on the first ring!” Ring. Ring. Ring. Ring, “Press 0 to speak to the operator.” Guess who just hung up? Not to mention, that caller will probably tell 10 people about the experience.

It is not enough to treat customers and potential customers with respect, they must actually like you. They have to feel good when they interact with you or anyone else in your business. Your customer service must run like a well-oiled machine for marketing, PR, or advertising to improve your business.

Know Your Target Audience Precisely

A common mistake made by small businesses is to cast a wide net when trying to attract customers. Although your products or services are probably suitable for a very broad audience, it is important to target precise segments because it gives you more of a marketing punch! In addition, you can be more choosy about who you want to do business with.

When you segment your target audience, you are able to have a deeper conversation. A target audience of, “women, age 25-54,” for example, can be segmented to, “women, age 30-45, with a college education, household income of $65K per year, married, own a home, have children in the public school system, busy with work and family activities, eat-out once a week, concerned about saving money.” With this new information, you are able to write a marketing message that will speak to these women:

Restaurant Print Ad – “Take a night off from the grind and treat your family to a night out. Enjoy family-friendly live music and receive 20%-off your meal when your kids present their school I.D.”

Jeweler Promotion – “Join us for ‘Ladies Evening Out.’ Enjoy wine tasting and cheese plates. Make out a Mother’s Day wish list and we’ll send a personalized card to drop the hint. In addition, anything purchased off the list in the month of May will be 20% off.”

Accountant Promotion – “Dear Busy Moms, It’s time to relax. Schedule an appointment to for your taxes in the month of February and receive a free manicure while your taxes are being done!”

Segmenting the target market creates opportunities to engage potential customers and show an understanding of their wants, needs, struggles, and goals.

Compare these ideas to fishing. A small business casts a huge net and catches some fish; however, they also catch algae, seaweed, a rubber tire…a boot. On the other hand, if you know what you are fishing for, you can attract the fish you want with the perfect bait. The results are fewer, less costly casts and more of the fish you want! The main goal is to pinpoint the precise type of customer you are seeking and attract them by showing a deep understanding of their needs.

To determine your target audience precisely, think of your number one customer or client. Who are they? What’s their business like, what are their interests, and how do they purchase your products? Think about what they look like and how they act. How do they want to be perceived? What’s their M.O.? What is there home life like? What kind of music do they listen to? Get personal. Get down to the nitty gritty details. Paint a picture with words. Once you have written down your description, your goal is to find more people like this. This is your target audience, your perfect fish, the fish you should bait and cast for in every marketing effort.

Workable Plan

Once you know who you are targeting, it is much easier to create a workable plan. Keyword: workable. Be mindful of how much time and money you have to invest and do not extend beyond this. The workable marketing plan can, and should, be simplified. It should be as simple as a 12 month calendar.

Look at the big picture: 12 months, 52 weeks, 4 seasons.

At the beginning of the year, or during your planning period, create goals for your business. An example: obtain 10 new clients, secure 10 speaking engagements, and position the business as the go-to company in the region. Then, start making plans to accomplish the goal by creating tactics that support each goal.

Let’s keep working with our example. The first goal is to obtain 10 new clients. You have a clean marketing calendar in front of you. Think, what times of the year does my target market purchase my products or services? How do they buy it? How do they hear about me? What types of activities are happening in the lives of my target market? Then, jot down ideas based on months of the year. Perhaps you send a direct mail piece, one for each new season (winter, spring, summer, fall), with a direct response coupon, and follow up with a personal phone call. Or, maybe you place a print ad in a local newspaper for a free sample, and follow up with a packet of information for the people who respond to the ad. Write down a targeted tactic for each quarter, and when you place a marketing tactic in a certain month, work backwards to make sure you plan and execute the work needed to get it off the ground. If you send a direct mail piece in March, the task for February is to create the piece, get it printed, and decide who you will send it to.

Continue to do this with your other business goals (i.e. secure 10 new speaking engagements, position the business as the go-to company in the region).

The most important part of your small business marketing plan is writing it down. If you do not write it down, it is not a plan, it is just a dream. This can not be emphasized enough.

Once the workable plan is finalized, keep a printed version of your marketing calendar right on your desk. Integrate it with the other parts of your small business and add your to-do items to your business calendar. Integrating the plan with daily business activities is key. Integration makes the workable plan workable.

Measurement

Every marketing effort must be measured. Measure everything. If it can not be measured, it cannont be improved. Do not employ a marketing effort unless it is measured. Yes, I just stated the same idea four times. Why? Because, small business owners loathe measuring marketing results. Perhaps it is due to fear of failure, lack of time, or they just do not want to be bothered with it. No excuses, here. Every marketing effort must be measured, otherwise you will never know if something is truly worth the investment. That is what marketing is: an investment. This investment can easily be measured.

The simplest, most sure-fire way to measure marketing is to utilize direct response. For example, if you place a print ad, include a unique web address in the call to action and record the number of hits you receive. If it’s a direct mail piece, record the number of phone calls you receive in response. How do you know if they’re calling in response to the effort? Ask ’em, of course. “May I ask how you heard about us?” It’s a question that people truly, do not mind answering. As you execute each marketing effort, keep a tally right on your calendar to determine the response rate:

Number of impressions / number of responses = response rate

The number of impressions takes different forms, such as the circulation of a newspaper, or the number of direct mail pieces mailed. When you divide the number of responses by the number of impressions, the result is the response rate. Once you determine the response rate, you then calculate out how much the effort truly cost your business:

Cost of effort / response rate = Cost per response

The cost per response is an important number because it levels the playing field when determining the overall effectiveness of a marketing tactic. An expensive marketing effort might be worth the high cost if you see it is offset by the high number of responses. In fact, it may be less expensive to invest more and receive more responses. Or, maybe it’s a pipe dream. Perhaps the Chamber newsletter print ad you placed was the most effective. You will know by calculating the cost per response.

Conclusion

By utilizing this simplified strategy and adhering to these principles, you will quickly identify areas of your marketing plan that are not working and be able to focus more energy on successful marketing tactics. You will have the insight to make small adjustments in areas of need instead of starting over every year.

Two quick tips for implementation:

If you find yourself working on something that falls into the realm of marketing, and it is not part of your workable plan, stop. It is very easy to get sucked into the idea of the week, or something you think is important. Keep the big picture in mind. You can tweak your workable plan throughout the year; however, it is important to follow through with your initial thought process. Otherwise, you will forever fall prey to the idea or deal of the week.

Don’t be shy. As you start to implement your workable plan, you may find yourself thinking, “This is too aggressive,” or “I’m putting myself out there too much.” Don’t. You thought this through and it makes sense. Your business is a value to others and they need to know about it. Move forward with confidence!

Contact Creative Marketing Guru for a free marketing plan worksheet.