One of the toughest things about starting a new business is knowing where to put your money so that you can really grow the company. Perfecting your product? Marketing? Upgrading equipment or systems? Staffing? It can be overwhelming — and risky.
It doesn’t have to be scary though. A lot of it is really a question of what to prioritize first so that your money is being invested into the company as wisely as possible. Here’s a roadmap to help you think of what to prioritize, and when.
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Perfect the product
Before you put money in anything else, make sure the product or service you’re selling is rock-solid. A high-quality, unique product will make you stand out from the pack more than anything else you could do. Satisfied customers, word of mouth and good online reviews are the most valuable marketing tools available to you. It will also help ensure that employees working at your company believe in the product and are excited about selling it to customers.
The place to start here is with the concept — and for that, originality is key. What is the niche you are filling, the market problem that others haven’t solved? For us at StickerYou, the unique solution we offered when we were starting out was the ability to order customized stickers online for all kinds of labeling needs. We created that at a time when no one else was offering that kind of customization, especially in the promo stickers and labeling space. That allowed us to stand out from the pack.
Once you define that niche, focus on investing in the market research needed to find your ideal balance between quality and price point. Then, work on making the product as high-quality as possible within your price range so that you’ll really give customers something to talk about.
For marketing, start small
So you’ve perfected your product. Now you need to get the word out. For this, start small so that you can experiment, and figure out what really works for your business and your clientele. When you’re starting out, you probably won’t have a ton of capital to invest in marketing, so you’re going to want to do the research to figure out what works for your company before diving into one specific marketing initiative. According to financial information company Sageworks, small businesses should generally be investing between 1 and 4% of annual sales in advertising and marketing.
Fortunately, a lot of digital marketing campaigns, if well thought-out, can be done on a microscale, allowing you to try out a variety of different methods and see what works for your business. Run a number of tests across different platforms and see what methods work for your business. Ads on social media or email newsletters are good places to start. Choose a small number of people you want to send the newsletter to, or impressions you want for your social media ad – say, 1000 – and then try a different newsletter elsewhere, or a different ad, and compare. How many clicks, how many conversions came from each version? This will help you hone in on what connects with your target audience and what works best for your business.
Keep your marketing nimble
One big mistake people can make as they’re trying to scale up their business is to just dump more money into the marketing methods that worked initially. Be careful here. As your company expands and grows, methods that worked in the beginning may be less effective. The business environment, your customers’ expectations and needs could all change. So it’s important to keep going back to that initial slow-and-steady method and keep testing out what works for you at each stage of growth. That money will be much better spent.
Hitting that tipping point
It may be hard to imagine when you’re in the thick of those initial stages, but if all goes well there will come a time when your business starts to hit its stride and you’ll have more stability and a steadier income. This is when you can really start investing in other key elements of the business that will help grow your capacity grow: more staff, more office space, better equipment.
This is an exciting phase because there is less risk. It’s less a question of whether your business will succeed or fail, and more one about what you need to do to maximize your business’s potential and opportunities. This is where you get out of the red and start to see the fruits of all that hard work.
Author: StickerYou Founder & President, Andrew Witkin
As the founder of a global e-commerce leader in custom-printed, die-cut products, Andrew Witkin is widely recognized as a leading authority on e-commerce, customization, startups, marketing and the tech economy. Witkin has also served as VP North American Licensing for Nelvana/Corus Entertainment and Director of Marketing for MegaBrands/Mattel.
About Carson Derrow
