This is probably the most important question that small business owners (and even marketers in large organisations) should ask at the beginning of a marketing campaign, and yet is seldom asked: “How much business do i really need ?”
There are basically two reasons for asking this question. The first is to give you a daily target to aim for. If you do not know how much business you want , you will never be satisfied. The other reason is to try to eliminate the risk of getting too much business – Sound’s strange ?
Yet in today’s groupon and daily deals obsessed world, it is something that every business owner and marketer needs to consider.
How much is too much or too little?
Start your marketing campaign, by working out exactly how much business you need to cover all of your costs.
Be Honest and realistic and rather overestimate than underestimate.
You can work out this figure for a year , a month, a week or even a day. I suggest that you work it out on a monthly basis, as it gives you a good picture of the business and is manageable.
Once you figure out how much business you need to cover all your costs, you will know exactly how much business you need to survive. This is the amount of money it will cost you to open the doors every day. This might seem really basic or even common-sense, yet most businesses fail , because the owners and managers did not have a good grasp on cash flow.
Once you have calculated how much money you need to survive, you can then decide how much profit you want to make from your business.
While it may seem counter intuitive and against logic to work out your costs , before working out how much profit you want to make – You need to do this ! Most small businesses fail because there is not enough cash to keep the sales going.
Add this to your survival figure and, presto, you now have a figure to aim for. This tells you how much business you want.
It is amazing how clear everything becomes when all of a sudden you know how much business you need to survive and how much business you want to make a profit.
When is too much business too much?
The second point , generating too much business , reminds me of the horror stories that we hear about businesses who have implemented one of the numerous deals of the day as part of their marketing campaigns. These businesses cant cope with the huge volume of new business that the deals campaign bring in.
While the campaign might even be a financial success, it results in a complete failure in terms of long-term marketing. Worst off all , it takes a really long time to rebuild your businesses reputation with existing customers.
The lesson to be learned is that before you start to do the marketing , make sure that your business can cope with the increase. While we all want our phones and emails to be running hot, we need to make sure that we can cope with the sudden increase in business by making operational changes that can support the business growth.
Remember : New customers that come to your business as a result of your marketing activity will be testing to see if you can deliver what you promise. If you don’t impress them the first time around, you may never get the opportunity to try again.
What questions do you think business owners and marketers need to ask before starting a marketing campaign?