Every new entrepreneur starts with a dream – a concept that they have thought about for many years. The problem that most face is understanding how to share their dream with the world. One client that I have put it simply, “I didn’t know where to go next.”
Doubt and unknowing is the reality of most people entering the daunting and intimidating world of business ownership. In fact, studies suggest that a significant factor that contributes to the failure of many new businesses is a lack of understanding of planting the seed for growth, and not effectively utilizing the initial limited resources that most entrepreneurs are faced with.
So where does one begin? Many of my clients own actual businesses that offer a variety of services, not a specific product. The downside to that is a significant increase in overhead costs, including permit and attorney fees, rent, utilities and other start-up costs. That alone can be overwhelming. These are necessary expenditures that are rarely negotiable.
However, many entrepreneurs fail to understand the importance – and absolute need – for messaging and identity. Suppose that you have invested a large portion of your initial capital in the building structure or renovation of your venue. You invest another portion on fancy packaging and display items. Finally, you are able to purchase your renewed items (food, merchandise, etc.). It would naively appear that you are ready to go. All T’s have been crossed, and you are ready to bring in the business. But there lies your problem. Where is the business?
If you make no reserves of your cash to invest in marketing, brand development, and PR, then chances are you will end up with a beautiful building…with beautiful things…and no one to purchase them. Why? Because no one will know that your business exists. Potential customers walking or driving by may be excited about your structure, may marvel at the architecture or lighting, but rarely will that be enough to bring them inside, and plant the seed for continued patronage.
So how much capital is enough to retain for marketing, brand development and advertisement? Most consumer specialists estimate that between 17-22% of your nest should be set aside and invested to spark interest in your product and drive the needed business to stay afloat in your first year of operation. That seems like a hefty amount, especially to start-ups who are literally building from the ground up. But well placed publicity is crucial to businesses that have not yet created a name for themselves in their area.
While we applaud each and every entrepreneur that believes enough in themselves to move to the next level, make no doubt about it that having a good idea, a special talent, or a creative service to offer does not secure or guarantee success. What I have learned over the years with my clients is that their businesses become more stable and having better growth potential when they focus their attention on their product or service. An overwhelming majority of business owners are not business savvy, and rely on outside firms or agencies to maintain steady growth.
People succeed best in what they know, and perhaps more importantly, what they are passionate about. Client “X” loves selling ice cream. He could sell ice cream from dusk to dawn and still leave with a smile on his face. Part of the reason that Client “X” can remain happy about selling ice cream is because he can leave the growth measures, product placement, and image creation to our agency. We thrive in the areas of public relations, marketing, and advertisement because that is what we love to do. It is what we wake up for every morning.
Stick to what you know, and leave the rest to the professionals. Dreams are not intangible. They really can come true…I’ve seen it time and time again. But one must be realistic and understand that it really can’t be done alone, and that trusting in an agency that can turn your vision into your future is the best money that you will spend.