Recently, I looked at how start-ups and small businesses are different. Unfortunately, I didn’t want to make that post any longer so I promised to follow-up with a post that would explore what this meant to the marketing of start-ups. As I mentioned, I don’t have a lot of experience marketing for small business so I asked if someone would like to contribute a post in that area since I can’t contribute the meaningful content I would like on this topic. This offer is still open.
In that post, the two fundamental differences I came up with between start-ups and small businesses are that start-ups aspire to be large companies and how each is funded with the start-up often relying on venture capital (VC) or angel investors that are not tied to the day-to-day activities of the business in any other way.
In terms of the impact on marketing, the funding of the business has the biggest impact in my opinion and it’s a double-edged sword. For start-ups that have received funding from a VC or other sources, the money is quite often a large sum which gives the start-up the ability and luxury of hiring some dedicated marketing resources and also allocating money to marketing programs.
It’s rare for the small business to have a dedicated marketing resource. Many times, the owner adds marketing to his or her already long to-do list. Having a marketing expert on staff definitely has its advantages, especially if the founder or CEO trusts that expertise and allows them to develop and implement an integrated marketing plan.
In addition to resources, this money also allows the start-up to run more comprehensive marketing programs as they can spend money on many different tactics and media to get the message out there to prospective customers. Having said that, many start-ups do tend to watch their money carefully so the budget may still be quite limited but with new social media tools and other tactics, you can put your start-up on the map without the million dollar budgets of the 90s (BTW - I can’t believe I just wrote that).
The downside of this influx of money is that the source of it usually has the objective of getting a large and quick return on that investment so new pressures are put on the start-up to deliver now. Combine this with the promise to grow big and start-ups need to land customers quickly and grow revenue fast in order to meet expectations.
Now I’m not saying that small business don’t have these same pressures to get customers and increase revenue, but they sometimes have the luxury to grow at a slower pace and don’t always have to answer to an outside source of funding if the business is self-funded. It’s a different set of pressures is all I’m saying; not that one is more pressure than the other.
From the perspective of the second difference, that of aspiring to grow large, the start-up needs to run more extensive marketing programs to reach more people quickly rather than the small business that may be able to focus on one small geographic area for instance.
If we look at the lead generation aspect of marketing, then the start-up marketing person (it’s unlikely to be a big team) needs to generate thousands of prospects so that the sales team has hundreds of sales-ready leads to pursue. The numbers can be staggering and have to be generated in an ongoing fashion to meet ever rising revenue goals.
If the marketing budget was increased with the funding then running these extensive programs can be easier but if money is still tight then these leads need to be generated in a very cost-effective manner. Again, thankfully new tools and tactics make this possible today.
There are other differences for sure and other impacts to the marketing of a start-up or small business but having the perspective above will help the marketing person or owner fine tune the objectives of the marketing program and develop the appropriate plan for the resources allocated.
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