Jack of all trades, master of all trades
Most people start a business because they’re good at doing something and see an opportunity in the market to do it first, differently or better. A software developer starts a software business; a chef opens a restaurant and the premise is that because you’re a great software developer or chef, you’ll build a great tech company or restaurant or if you have a good idea, customers will just come flocking.
The bad news is that in today’s competitive market, it’s just not enough to be good at doing the business of your business. You have to be good at three distinct things: The business of the business, the numbers, and marketing & selling. Any one of the three or even two of the three is just not good enough.
We all know of some great products and services that have failed miserably and equally some pretty average products that have done spectacularly. The difference between the two is that spectacular companies have spectacular management teams who really understand the three disciplines. They have teams who understand the product and service, they have monthly financial information (P&L, Balance sheet and most importantly – a rolling cash flow forecast), which enables them to make informed decisions, and they know how to market and sell.
An early stage business may not have a management team – it might just be you! So, you need to get expertise in financial numbers, sales & marketing techniques and you shouldn’t be afraid to get some outside help (e.g. a mentor, business coach, Non-exec director) to advise, guide and teach. This article and the next few weeks of points and tips will focus on understanding the crux of marketing & sales to help you use it to your advantage.
Marketing – is it a cost centre or profit centre?
Most of the entrepreneurs I meet and work with make the mistake of viewing marketing as a cost when in fact it should be viewed as an investment. They simply fail to properly invest in it claiming that they don’t really have the budget. But if we can come up with a marketing strategy, which, for every £1 spent, it returns £2 in sales – then we’ve just created an unlimited marketing budget!
The key to this is to test and measure everything you do. Build a marketing plan that has multiple strands to it, run each of them and measure the results. The parts that aren’t working – modify them and try again. And in this way, we can hone a series of strategies that work.
Uncovering the real USP of your business
But, even before you embark on investing in marketing, it is vital to establish your USP’s and to clearly differentiate yourself from others in the market. So, what’s different about your product or service from the rest? It’s not good enough to say “We give better service, our product is unique, its better than the rest” although this is the stock answer I repeatedly hear. If you don’t have something that appears fundamentally different, the only differentiator then becomes price – and there’ll always be someone cheaper than you – not a good place to be. Differentiation normally means you can achieve premium pricing and an ability to take market share.
For most early stage entrepreneurs, working out the right messaging and differentiators and putting marketing campaigns together and executing them are skills they simply don’t have. You may have the best product in the world, but without sufficient investment and capability in marketing and selling – the odds are that it may not reach its potential. So, my advice is to make sure you get the right outside help and sufficient funding/budget to get the right messages to your target market.