Patience & Marketing – The Two Forgotten Arts In Small Business
Maintaining a successful small business in today’s environment is extremely difficult. Starting one up and being successful is even more difficult. Research says most start up companies will fail within the first five years.
That is depressing. But it gets worse. Scott Shane is a professor of entrepreneurial studies at Case Western University and author of The Illusions of Entrepreneurship, to be published by Yale University Press this month. In an interview with Business Week.com, Shane said,
“At the individual level, the core fact here is the typical, median, right-smack-in-the-middle entrepreneur is a failure….the myth is that somehow if you manage to hit the average or hit the median, you’re going to be fine. The reality is that the distribution is so skewed you have to hit the top for it to matter, and in fact, you have to hit the top 10% to have income as an entrepreneur better than what you would have gotten working for other people.”
I don’t share this information to discourage anyone from starting or from remaining in a small business. On the contrary, small business is the backbone of the American economy. My purpose is to be very upfront about the challenges so that anyone pursuing a small business enterprise will be careful to avoid the pot holes of failure along the way.
In this post, I will only deal with two of those potholes. The first is, too many small business owners are in a hurry to be successful. Like we shared in one of our recent posts, God grows weeds overnight, but he takes years to grow an oak tree. There are no shortcuts to building a soild business–there are only dead ends that look like short cuts. You cannot skip the steps necessary to succeed and still succeed. You have to take the time and go through the pain of taking each individual step in its turn. That is true whether you are talking about revenue building, employee development, capital acquisitions, or any other aspect of running a business.
Shane talks about that very concept in his interview. Asked why he believes the typical small business owner makes decisions which lower the chances for success, Shane replied,
“Part of it is that they’re in a hurry and don’t have time. So to give you a good example—a business plan. We have lots of evidence that all kinds of performance measures of startups are enhanced if you write a business plan. But a lot of people, actually the majority of people, don’t write them. If business plans help and they don’t do it, why don’t they do it? I think one reason is if you’re not going to raise money from another party, the sole purpose of the business plan is to help you run your business. But if you think, “But it’ll take me a lot of time to write it and I could just be starting,” if you’re in a hurry, you just start, and it handicaps your business. So I think one part is the rush.”
Patience is a forgotten art in today’s quest for immediate gratification. We want what we want, and we want it now. Unfortunately, it doesn’t always work that way.
The second forgotten art in Small Business is the practice of marketing. Everyone knows how to sell, but few want to go to the trouble of marketing. Some don’t even know the difference between selling and marketing. It is true, they are opposite sides of the same coin, but they are still very distinct from one another.
In sells, you have a product, and the goal is to convince masses of people of their need for your product and that yours is better than the next guy’s. Marketing is completely different. Instead of taking a product to the people, you go to the people and find out what they are wanting, needing, or using. Then you develop a product or service to fill that desire, to meet that need, or to accomodate that use.
Many businesses jump right into selling because they think that is where the money is. But, unless they know their market, their sales suffer. So, marketing is a very necessary tool in small business. The problem is, it can be very expensive. Major corporations spend tons of money on big consulting firms to do detailed market research. Those kinds of tools are not affordable for most small business folks. But, that doesn’t mean marketing cannot or should not be done. It simply means small business folks have to be more creative.
In the January 9, 2008 issue of Business Week, John Tozzi wrote an excellent article entitled “Market Research On The Cheap.” In that article, he details several marketing options for small businesses that don’t have big marketing budgets, but understand the essentiality of good marketing. I give excerpts from his Tozzi’s article below:
1. Research the same way you sell.
While “market research” may bring to mind spreadsheets and pie charts, your first step before introducing a new product or launching a business should be to interview your potential customers the same way you plan to sell to them, according to Rob Adams, director of the Moot Corp Business Plan Competition at the University of Texas, Austin and author of A Good Hard Kick in the Ass: Basic Training for Entrepreneurs. “If you sell in person, survey in person. If you sell over the phone, survey over the phone,” he says. And for entrepreneurs who plan to sell primarily online, a Web survey can gauge interest. “If you get no results, that should tell you something,” says Adams. If you’re not sure who to talk to, he says, take a clipboard to the mall on Saturday morning. Above all, you must have a direct interaction with the people you imagine will buy your product, marketing experts say.
2. Mine public data.
You’ve already paid for some of the most expensive market research available—with your taxes. The U.S. Census Bureau Web site contains demographic information you can use, often broken down to the neighborhood level…. Beyond the census, you can search federal databases on banking, labor, housing, agriculture, and imports and exports, all without paying a cent.
3. Recruit Business School students.
You may not be able to afford professional researchers, but you can call a local business school and see if a marketing class can help you with your research needs. Many professors are eager to create assignments from projects for small business owners, and students benefit from real-world experience.
4. Survey online.
You can select from an array of Internet survey companies to get a quick take on a product or service. Some online polls are free for a limited number of responses….Vizu, which places survey questions in banner ad spaces on blogs and Web sites, can target polls based on the audiences of those sites. “If they want to access business people or tech enthusiasts, we’ll limit where we place the poll,” says Vizu Chief Executive Dan Beltramo.
5. Create an online community.
Web-based businesses in particular can set up and moderate panels online to glean insight from customers. Forums or live chats reveal customers’ experience with your product or perception of your brand. If you already have a database of customer information, you can handpick which customers to invite to the forum to get the sample you want.
So there you have it–Patience and Marketing–two very affordable, yet essential elements in any successful business plan. You cannot always do things the way the bigs boys do them. But you can do the things the big boys do in a way that makes sense for your own business needs.
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