Marketing is marketing is marketing correct? Wrong! Marketing should be based upon the economic cycle coupled with the maturity level of your business. This article will explain the differences and help you develop the skill-sets of how to market any business in any economy.
Most business experts would agree that there are 7 stages of the business lifecycle. All phases have their pitfalls and challenges. Marketing is different in each phase, so before you start your marketing campaigns you will need to take note of the phase of your practice and the economic cycle.
Seed phase is where most new businesses reside. This is where your business is just an idea. Marketing during this phase should be aimed at gaining acceptance. A great way to do this is to create a niche for your business. In a poor economic climate, it will be much more difficult to get your name to stick because people will be holding onto their money and reluctant to spend on anything.
In a good economic climate, the opposite is true. People are willing to spend their money much more freely. During this phase, it is imperative that you have a good team of advisers. Hire a good CPA, attorney, business coach, and insurance agent. Your CPA will help you set up your books and advise on the most tax-efficient legal entity. Your Attorney will help you negotiate and review all legal documents. Your business coach will help you find the correct location, do a proper build out and help you to launch your business. Your insurance agent will help you get the insurance protection you will need.
Start-up is when your business is actually born. Will you be an LLC, Sole proprietor, Sub Chapter S Corp etc? These are all the legal entities that you need to discuss with your attorney and accountant. Once you choose the entity and are established, your business legally exists. Congratulations!
Marketing in this phase is about creating a customer/client base. It is vital that you start to create conservative strategic-based marketing campaigns so you don’t burn through your limited bankroll. Your advisers are very important during this phase. They will help you limit mistakes which can be quite costly.
Learn how to identify the true needs of your client/customer, and the needs that they would be willing to spend their money to fix. In a poor economy, you will need to increase your marketing budget. Since people are reluctant to spend money in poor economic times, you will need to increase your marketing budget because you will have to get your message out to about three times the number of people to make up for those that won’t spend their money. Your accountant will help you create budgets. Your business coach will help you organize your day-to-day tasks, as well as help you to establish the correct procedures that will carry you to the growth phase of business.
Growth is where your volume and revenues are increasing rapidly along with multiple opportunities. During this phase competition also begins to surface. Management of your business should take priority over marketing during this phase. To keep the growth phase going, your systems will have to be able to support your volume. You will need to find, hire and train employees that will enable you to delegate tasks.
You should be getting plenty of internal referrals. Your marketing efforts in this phase can turn more inward. Customer appreciation events, in-house events, Social media, and the like are good marketing tools in this phase. External marketing can be an ongoing print, radio, or TV advertisement. The economic cycle will have little bearing on your efforts during this phase because your momentum should offset any negative economic ripples barring a full economic crisis.
An insurance agent should do a quarterly review to make sure that your insurance coverage limits are still adequate. Your accountant should be concentrating on establishing retirement plans and help you budget so you maximize your contributions. Your business coach should be helping you to organize your time, create procedures that will allow for continued growth, and help you with hiring staff. Your attorney should also be ready to help you review contracts for the many opportunities that will present themselves to you during this phase.
Established phase is where your business has matured and is thriving. You have developed a brand and customer loyalty. Your growth is predictable and manageable. Marketing in this phase should emphasize your established place in your community. Ideal marketing should become more passive which will allow you more free time to pursue the lifestyle that you have worked so hard to achieve. The established phase is also ripe with pitfalls. The biggest pitfall is complacency. Be aware, that during this phase, it very easy to rest on your laurels. Doing so will encourage a roller coaster type of business. Remember you should have name and brand recognition so keeping TOMA (Top of Mind Awareness) is the goal.
Your CPA should be helping you to minimize your tax bite and maximize your profits. Your business coach should help motivate you so you don’t rest on your laurels and help you establish goals. Those goals will help you decide whether to expand or wait until a stronger infrastructure is built, or a better economic climate presents.
This is usually created and driven by the owner. This phase will allow you to move into new markets and gain a larger market share. This phase has many pitfalls where money can be lost and/or wasted very easily if careful money management techniques are not deployed. Marketing during this phase should focus on the introduction of new complementary goods and services. This phase is very similar to the growth phase. Be extremely careful that you do not move into an unrelated business because the results can become disastrous.
For example, many successful business owners ventured into the real estate market during the boom of the early 2000’s only to find themselves in a heap of trouble when the bubble burst. The economic cycle is very important in this phase. Expansion during a recession or contraction of the economy must be done very carefully. Use your advisers to guide you with items like creative financing.
This phase occurs when sales and profits are predictable, stable, and consistent. It is normal at this phase for revenue to start to fall off which forces the owner to either expand or exit. Marketing in this phase is aimed at keeping a steady flow of new customers. Usually, the business owner will be in business for 15-20 years so it is natural for the owner not to want to utilize active marketing.
The mature business has name recognition, an identity, and a positive place in the community. This phase lends itself to sponsoring opportunities, educational based marketing, and to guest lecture spots. Your business coach will help you create goals that will allow you to move to the next phase of business. Your accountant should be discussing your retirement needs. Your insurance limits need to be reviewed. At this point, the house is probably paid off and your children grown. You may be insuring more than you need to at this stage.
The opportunity for you to cash out after all your years of hard work. Your advisers will be able to help guide you through this phase. Marketing will be to find the right buyer and create a smooth transition. Your accountant and business coach will be able to help you structure the best deal. Your attorney will create all legal documents for the transfer of sale.
Throughout all the business cycles your happiness and the happiness of your family is what matters. You deserve to have a well-balanced business and family life. A dynamic profitable business does not happen by itself; it has to be planned, created, nurtured and tended. The steps listed above should put you well on your way to achieving the business and success that you want and deserve.
Mistakes are very costly in both time and money. Use advisers and don’t rush. Do your analysis, know your economic cycle, market effectively and sit back and enjoy the fruits of your labor, you deserve it!
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