How do I get out of the small business circle of death?
I barely earn enough money to keep the doors open so where do I get the money to spend on marketing?
Unfortunately this is more common than needs to be. If you have read the excellent book by Carol Roth she does a terrific job addressing the fact that you need to be brutally honest about your numbers.
The reality however is most entrepreneurs simply go into business because they don’t like their boss or want to be their own boss (a quick look you may think that is the same reason but they are different motivations). Rarely does a small business owner open a new venture because the competitive advantage is obvious and can be exploited AND have the resources to carry out the strategy.
Here is the good news- resources are not only cash…
If you are bootstrapping an existing business you have two choices, “hit the bid” as I would say when I was mentoring stock traders when they were in a losing trade. In other words get out, move on.
The second choice is get moving on your assets that are not capital.
Bundling your product line: Bundling a package is a time tested method to increase revenue. As long as the margins are not prohibitive and the time to deliver is within your normal process.
Existing satisfied customers: ask for referrals and give a reward for the gesture. Consider it hiring a sales teams. The key here is to first thank them for choosing you and ask if you can help someone they know who may have the same REASON to use your product or services. I say reason because it is about them not you. Lead the referral request with benefits to the user.
Vendors: If you have inventory or business relationships (service providers), make a list of those who may already have your perfect customer but is not a direct competitor. There are many names for this but the one I like the best is “qualified referral.” The best sequence for this to get done is to “do all the work” for them and simply give them the offer to make to their customers. If you make it easy the odds of it happening are good, if you ask the to do the work, in my experience it has no shot of happening. (of course be prepared to offer a referral fee).
Sell something you don’t produce: The technical term for this is affiliate marketing and very uncommon for small business to consider. What can you offer your customers that could help solve a problem or achieve a goal? Think about this, YOU have a list of people who trust you. Find something you would be happy to introduce to them and earn a commission yourself.
If you are reading the above two methods and saying “I could never so that” I will tell you that is how businesses grow from $1 million to $5 million. Think about it, sell to customers you don’t have to pay to acquire unless they buy something and earn commissions for stuff you don’t have to pay to produce.
One last comment. If you are en entrepreneur who is tight on cash and thinking this is a lot of work, I ask you “is it more work than going out of business?”
Make that list and get to work!