They say there is more than one way to skin a cat. I’ll have to believe that is true, not because I have tried it, but because I have found that there is more than one way to do just about anything.
In business school my accounting teacher taught me how to keep books. He even offered some advice on how to run a profitable business. I looked up to him because he dressed like he was successful. In the 80’s, TV shows like Dynasty and Dallas showcased shrewd businessmen in sharp suits and monogrammed dress shirts as cultural icons. My teacher looked like them. So when he said “To be profitable you cannot exceed your marketing budget”, I believed him. I estimate his advice has cost me more than 5 million dollars.
My instructor was a bean counter. I now understand why he gave the advice he did. You have to watch your spending. But what I have learned the hard way is that it is more important to watch your sales. If you are spending your time cutting overhead while your sales staff is posting pictures of their cat on Facebook, you are going to go broke. There is nothing you can cut in overhead that will compensate for a lack of focus in sales.
But to bring sales you need to market yourself. I’m not suggesting that you advertise, that is just one element of marketing. What you need to do is take a long hard look at your business. What image do you portray? If your store front or vehicles are dirty or beat up, you are not portraying an image of a successful business. How are your customers greeted? You have to look at your operation as an outsider and ask yourself “Are our sales slow because customer doesn’t know about us – or is it because they do?”
If you see areas that you can improve, improve them. The bean counter will tell you that you can’t afford it. And they will be right. But there are some things you can’t afford not to do. Train your people and hold them accountable to performance. You have to make sure that you can capitalize on new traffic. Once you believe you have things in order, then you can advertise.
Cleaning up your image, training staff, and advertising, all take money that the bean counters will say you don’t have. But marketing does not cost if done correctly. It pays. It pays far better than the stock market or any other investment I can think of. In the worst cases marketing costs are 25%. And that is how the bean counters present it, as a cost. But your stock broker will present a 25% cost as a 400% gain.
Invest, don’t spend.