Each month when I make out my budget, I allot funds to many things I consider "expenses." These are necessities that I need to survive and thrive, but they're sunken costs. I won't see a return of that money. Items like food, my car and its maintenance are examples of those things.
With my expenses, I try to be as frugal as possible. Do I need the $3.00 jar of premium brand peanut butter, or will the store brand provide the same nutrition at half the cost? The same is true of my car. I can get from point A to point B just as well in my Toyota Corolla as I can in a Mercedes Benz at a fraction of the cost. The Benz might offer status, but there's no real return on the money spent to own one.
There are some other categories in my monthly spending, though, that I consider "investments." These are outlays that will (most likely, if managed correctly) offer me some return. At worst I hope to get that money back at some point. If all goes well, I'll see a bit of a profit.
In that bucket are things like my retirement fund, my house and money I devote to marketing my business.
That's right. Marketing my business isn't an expense; it's an investment.
I do have some expenses with my business. Money spent on office supplies, internet costs and the like won't be returned. They're the "food" needed to keep my business alive. But the money and time I put into marketing should, if I'm doing it right, result in more clients and more revenue.
Too many small business owners mistakenly view marketing as an expense. As such, they try to tick off that check box as frugally as possible, just as they would with any other expense. That's a wise approach to expenses.
But when we treat investments like expenses and skimp on what we put in, we begin to limit what we get out of them.
I remember one of my first clients a few years ago who was running a small private school. When I looked at his marketing budget, I noticed he was spending a nominal amount for ads on placemats at a local diner. When I asked him about that, he said, "That's a great deal. They gave me space for almost nothing."
My response to him was, "Well, unless they're actually giving it to you for nothing, it's not a good investment." You see, the target audience he was trying to reach (young families with kids) didn't frequent that diner. It's clientele were mostly retired folks who came there for breakfast and early dinner. He was spending money on marketing, but his "deal" wasn't getting his message in front of the right sets of eyes.
Are you making the right investment?
Just like with my personal investments, I have to manage my business investments wisely. Simply spending the money doesn't guarantee a return. But statistics like I published a few weeks ago suggest that small business owners either aren't investing at all in marketing, or are investing poorly in outdated media.
If I buy the most expensive house in a bad neighborhood, that's a poor investment. My cash outlay might be the same as if I'd bought somewhere else, but the return on my investment will be limited. Similarly, if I buy the house but don't invest in its upkeep and improvement, I'm hurting my return.
If you're a small business owner, what's the status of your investment in digital marketing? How's your website? Is it helping you get more business? What about your social media presence? Maybe you even have Facebook page or a Twitter account with lots of "likes" and "followers." Is that translating into revenue?
If you need help with your small business marketing investment, contact us at Knuckleball Digital. First of all, as small business owners ourselves, we know you don't have extra piles of cash to throw away on risky investments. You need to get it right the first time.
We'll put together a free consultation for you where we evaluate your current investments and tell you what we think you can do to improve. Of course, we'll tell you how we can help you do that, too.
You can spend all you want at Staples stocking your office. If you don't have customers coming through your doors, you'll have a bunch of leftover paper and ink when you close up shop. Start investing in your small business by putting together a sound digital marketing plan.