Category Archives: Your Money

Advertising Your Products, Suppliers-Good and Bad, Your Money

Steve’s Marketing Rule

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Steve's Law of MarketingAs our business grew, we made a real effort to measure each marketing program to find out how much of a return it provided. We carefully monitored our online campaigns, and used incentives like coupons to test the effectiveness of print ads.

Because we measured the return on every dollar spent on marketing, we learned a simple rule that’s proven true virtually 100% of the time.

Steve’s Marketing Rule:

Never trust anyone who tries to sell you anything marketing related.

In other words, never trust someone who is making the slightest effort to sell you online ads; print advertising in magazines, newspaper or flyers; search engine optimization (SEO) services; TV or radio ads; customer email lists; or any other marketing-related service you can imagine. This also holds true as your company grows and providers that you have used successfully in the past approach you to sell add-on offerings.

Here’s Why

The truth is that the better the marketing-related service, the less it needs telephone salespeople, email Spam, and other kinds of outbound promotion.

Any advertising or marketing-related service that can show a positive return is quickly adopted by companies who are hungry for better sales, and a little positive word-of-mouth spreads rapidly among prospective clients. So if a marketing service or advertising media is any good they’ll almost never make any real effort to approach a small company like yours first.

Choose Your Marketing Programs Carefully

Our QuickBooks reports show that advertising and promotion are always a very big part of our expenses, and choosing the right marketing programs was critical to our success. I’ve found that the most reliable way to create productive new marketing campaigns is to:

  1. Figure out what media your prospective customers are most likely see; this could include online searches, targeted magazines or newspapers, YouTube videos, and so on.
  2. In each case, look for how other companies who appeal to your same target audience are using the media, and consider starting out by matching their style of ad.
  3. Measure the effectiveness of every campaign, and keep working to improve your results over time.

It can also be a big help to share your advertising experiences – good and bad – with people at non-competing online stores.

Steve’s Marketing Rule is really just a corollary of Steve’s First Rule of Money, discussed in the next article.

Next: Steve’s First Rule of Money

Suppliers-Good and Bad, Tips for Your Business, Your Money

Steve’s First Rule of Money

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Steve's First Rule of Money

Steve’s Marketing Rule, discussed in the previous story, is really just a corollary to a general rule that I’ve always found to be true.

While this general rule doesn’t have much to do with selling online, I think it’s worth sharing.

Steve’s First Rule of Money:

Never trust anyone who tries to sell you anything with a measurable monetary return.

Specifically, this rule says that you should be very skeptical of anyone who is making the slightest effort to sell you financial investments, insurance, marketing services, or anything else with a monetary return that someone could possibly measure or predict.

Proof

There are plenty of professionals who can analyze the expected return of just about any investment. And, smart marketers know how to measure the return of almost any ad campaign or marketing service.

You can be sure that if experts believe that an investment is likely to deliver even a slight advantage  (or, in the case of insurance, slightly lower costs than the competition) word will get out, people will rush to buy the offering, and there’s hardly a need to promote it.

Friends in Need

Of course, this also holds true of anyone who asks to borrow money. Individuals who pose an acceptable risk can find ways to secure a loan, whether from a bank or a pawn shop. If you value your relationship with that person, give them money instead of loaning it.

Next, we’ll talk about a costly marketing trap that I discovered the hard way.

Next: Amazon Is No Friend

Your Money

Keep Starting Costs Low

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Keep Starting Costs LowA key to survival while you test your product idea and grow your business is to minimize your starting costs. This gives you the chance to try different business ideas, if necessary, without too big a drain on your family finances.

As long as you possibly can, work entirely from your home using your family computer and inexpensive software. Stay away from any non-essential services that charge a monthly fee, and especially avoid those that charge a percentage of your sales.

NoteWhen you open your first web store you should expect to pay less than $10 per month to your web host, less than 3% in transaction fees to your payment processor, and that’s all.

Consider taking on additional expenses only after you’ve proven that you can sell profitably and satisfy your first few customers. Once you’re confident that you can grow your business, your next investments might include more online advertising, along with basic items to help you work efficiently.

Equipment for Selling Physical Goods

If you ship physical goods, you’ll need basic equipment to fulfill orders.

  • Inexpensive tables and shelves to store and prepare products
  • A reliable laser printer to make shipping labels and packing slips
  • Dispensers for packaging tape and wrapping paper
  • An accurate postage scale

Business Software

Software can be a big part of your startup costs. I recommend searching online and in warehouse stores for the best deals – and even buying discounted versions that are slightly out of date – but always find a way to license your software legally. Software that you might need early-on includes:

  • Spreadsheet and word processor programs
  • Image editing software to help make images on your website look more consistent
  • Once you start to generate sales, accounting software like QuickBooks

If you search online for open source image editing software you’ll find free alternatives to Photoshop, the program that many professionals use despite its great cost and complexity.

You’ll also need up-to-date antivirus and a way to frequently back up your computer files, as discussed in our story about keeping your money safe.

Part of growing your business is striking the balance between making investments to help you work more efficiently, while conserving your personal funds until you know that you can succeed. We’ll talk next about a few key services you can buy that will make you look bigger than you are.

Next: Look Bigger than You Are