“A big business starts small”
– Richard Branson
Every great corporation and business empire started somewhere. There are foundational truths that all successful companies are built on. Today, we are gonna talk about some of those on this episode of Straight Shot Marketing Podcast.
Welcome to a new series we are doing on Small Business Start up.
In this series we are going to talk about the roots and fundamentals of owning a business and then talk with several local resources that business owners and entrepreneurs have at their disposal.
That’s right we have several interviews lined up from various organizations and resources that are available to both new and existing businesses.
But today’s episode is the start of it all and we are going to talk about the foundational elements to owning a business.
These will also serve as a good reminder and thinking-back for existing business owners as well.
So there may be a little tough love in this episode. We are going to be talking about money and the elements that should be done when starting a business. If you are an existing business, this may be information that you missed out on and need to revisit. If you are a new entrepreneur, then this information will be gold for the journey ahead.
We are going to give a lot of information today and then in the coming episode, we’ll talk more about the resources that are available to help you achieve what we talk about today. So, fret not.
Three major areas that a business is built on
As a business owner, or someone in leadership, your business is propped up by these three columns. They build you towards success.
And they should be evaluated each business cycle, normally annually.
Blue Print Planning for Success
There are several “rules of thumbs” and “best practices” when it comes to operating and growing a business in the most effective and efficient ways possible.
So we are going to discuss Setting Up Your Business For Success:
When first starting a business’s journey towards success it is imperative to set up it’s foundation. You have to set up:
Once your brand is developed, it is used to develop marketing tools that will communicate who you are, what you offer, how you are different, and what you are about to the public in ways that will help them to remember you and choose you in the market place. It is imperative that those tools be their most effective and used in the most efficient ways possible. That’s a lot of responsibility for the company.
-Once that happens, your business starts to grow.
-and that growth reinforces your foundation and leads to more awareness and support for your brand, provides profits and the ability to invest more into your business operations and communications for expansion, etc.
Your brand brings value to your business. We talked about that in the Rise and Fall of Atari episode… and the Lessons From Coca-Cola series.
So that’s an overview of the set up and basic patterns for business. But while businesses are set up to make money, there are initial investments to get it set up and started down that path.
The Costs of Business:
All business costs have an initial investment, as well as on-going.
While Administrative/Legal Compliance is always important to business, Marketing and Operations are the two most essential elements to running a business and both take considerable investment.
Cost will vary depending on industry, the product or service being offered, the number of employees and raw materials necessary to physically bring that product or service to the public.
On the Operations side, some elements, like a building or shop and the equipment needed to operate have an initial cost and then their upkeep/maintenance is less expensive. And you also have Payroll, utilities, and inventory that are also necessary to operate the business, representing more on-going costs.
In Marketing, elements like brand development, consumer targeting, initial design, and production often have an initial cost and then advertising, postage, reprints, and events that are necessary to communicate those elements of the brand represent the more on-going costs. So be mindful of both initial cost and on-going costs when you build your business plan.
Yes, and then plan for growth revenue to be invested back into the company before profits are realized. This is what spurs growth and expansion.
Now the reinvestment for administrative and operations will depend largely on the industry . But the business standard for setting a marketing budget is 8-20% of the business’s gross revenue. A new business, prior to having an established brand, should be spending 20-30% in a more aggressive strategy. Remember the magic 20% from the Lessons From Coca-Cola series we did?
This is all after the administrative, operations, and brand foundations have been established.
Again, there are initial and then on-going costs of business.
Now, since we work in the marketing column of this business house. Let’s spend a little more time with it because statistically lack of business communications and branding is one of the highest reasons that companies fail. For some reason, people can understand the need for production but they don’t understand, or remember anyway, that they need to tell people about what they are producing.
Every business consultant or successful CEO is going to tell you that you have to market your business. If you look at the stories of successful businesses, you can see it .. but for several people, it seems almost like an after thought.
It’s one of the columns your company is built on, without it, it will crumble.
More than 50% of your business is:
Yes and proper, effective, and efficient communications are built upon having a defined brand foundation.
So how do you know if you have a defined brand foundation?
In the early stages, you have to build that foundation but
before you can do that, you have to plan. I’m a huge proponent
of planning. And financial capital organizations and individuals, expect it…. On paper
So let’s break that down. Let’s talk about preparing for success, building that foundation, and planning for your company.
Little disclaimer here, as we get more info the numbers and processes:
I AM NOT A CPA. Zachary is not a CPA. But, based on our observation and experiences with companies…and Zachary acts as an interim and outsourced CMO of many companies…and a Business Coach.
Let’s discuss, let’s advise the good people in our audience.
Organize Financial Information
The first step to creating a business plan and budget is to get organized about your financial situation.
Understanding your finances starts with organizing your information:
New businesses will be based on projections
Existing businesses should base Everything On Last Year’s REAL numbers. Your CPA should be able to provide that to you if you don’t know what they are.
Categorize them under each of the three business columns we discussed:
First comes set up costs - that foundational element.
If you are an existing business and any of these elements are missing, we need to plan for catching up. Getting these taken care of as soon as possible.
Then we have on-going expenses:
3) Marketing Communications
Again, see where you are with each of these. Some of the marketing items won’t apply because of your industry (for example, maybe your industry doesn’t have an expo and event marketing is not in your strategy) or even because of the limited budget during your early years but Known Where You Are – knowledge is power.
Now, I am a proponent of planning as a mentioned.. And I believe that your business plan is a living, breathing document that grows each year.
I think all 3 columns, need to have a strategic plan for the coming business cycle each year to present at budget meetings.
As part of our process, Reformation Productions measures the success of our clients at the end of their year and then we make a new strategic plan for either company growth or maintenance for the coming business cycle based on activity during the preceding year.
Beginning of the Year
End Of The Year
At the end of the year when preparing for the next biz cycle
Make and Analyze Benchmark Comparisons
Again Know Where You Are
Knowledge Is Power
Set Goals Based On That Information
Plan Where You Are Going
Proactivity Is Efficient
Set A New Year’s Budget
Ok, that’s a lot of info. Let me give out some helpful info that is relative to our sponsors today.
One of the areas we discussed was administrative. And this episode is sponsored by Tresta. Tresta's virtual business phone system helps you communicate smarter with unlimited calling, texting and call management tools in an easy to use app. It turns any smartphone, into your business phone. While keeping your personal and business lives separate. Call and text on your business number from any device with the Tresta phone app. There is a free 30 day trial at tresta.com/straightshot.
And of course, we have the agency – Reformation Productions.
We specialize in the brand marketing column.
Now without all three of the columns, your business comes crashing down – whether it’s too many missed calls or voicemails or not having a proper brand for your company. Let’s talk a bit about how all these elements work together. Zachary, I believe you have an example for us:
Set Goals Based On Brand Development Information
FIND WHAT WORKS
Build Your Foundation & Expand
THE STRAIGHT SHOT
So Zachary, in the way of our Straight Shot for this episode. How does a company achieve these goals for success.
Now, if you need help… tune into the next episode of the series! Because we are going to have a guest that is a resource to help you with business planning.
Now, here at the agency, we can provide a business check up, like I mentioned before, business coaching and all the elements of the marketing column. So if you have the other two columns mastered, we can help with the third.
You can reach us at reformationproductions.com or call 678.825.8086.
Now if you have a question about this topic - small business start ups or business planning. Let us know and we’ll answer it during the series. We have guests from remarkable organizations coming in and we’d be happy to help. Just email us at info@ straightshot.net or direct message us on social media. Call us, whatever works for you.
I do hope you got value out of the show today for your business. Please take a minute to like and subscribe - hit the little bell on youtube - and visit our sponsors. That stuff really helps us out from an administrative stand point for the show. Thank you very much
But that’s it for today’s show. So until next time, Bye
Category : Straight Shot Marketing Podcast
Reformation Productions is a full service marketing agency in the Atlanta, GA metro. To find out more about the agency visit www.ReformationProductions.com. Connect with us on Facebook at fb.com/reformationproductions. Blog content is © Reformation Productions. To receive more marketing tips and insights, sign up for our newsletter, Straight Shot, at www.ReformationProductions.com/contact.html to be one of the first to know when they are published here at www.ReformationProductions.com. You can also sign up for notifications by texting "Reformation" to 90210 from your mobile phone.