In a small company, it is often difficult to find time to organise for things to be done. Each day, orders must be filled, customers must be served and bills have to be paid. For every business owner, these things are just as important and immediate.
With many responsibilities for business owners, marketing can easily be put off. That is why so many small businesses solely depend on ‘word-of-mouth’ referrals to grow sales and customers. They are hoping that their existing customers will refer new customers to them. Understandably, this can be an attractive option because it does not require cost or time. The reality is, however, for most businesses, this is not enough. Things are made worse in a slowing economy when competition for business increases.
The only way to stay in business is to make sales. And the key to making sales is through ongoing marketing. The truth is that even effective ‘word-of-mouth’ marketing is nurtured by ongoing efforts such as maintaining contact with former customers, referral programs, networking and advertising.
It is also impossible to build a successful business – no matter how good the product or service is – if there are not enough customers in your market to sustain a business.
The size of the total market may seem like an irrelevant factor. It is often one that is overlooked. Consider an interior design service in a moderate-sized community. There may be enough people living in the city to support several interior designers. Looking at things more closely may reveal that the city has more designers and other similar competitors han originally expected. This may mean that the size of the market may not be sufficiently enough to support all designers competing for business. When establishing or relocating a business, consider the customer base to make sure there are enough potential customers for the business to be profitable. Here are some other questions to consider:
- What is the estimated size of your market?
- Is your market size growing or declining?
- By what amount per year?
- What is the estimated number of competitors in your market?
Marketing requires a commitment as a critical component for a business to succeed. This requires an investment in resources – both time and money – to grow a business.