How Much is Enough by Bob Osgoodby
One of the most vexing questions in running a home business, is
how much to spend on advertising. While 5 percent of sales might
be a formula, as little as possible" seems to be the standard
used by many startup ventures. People sign up as an affiliate
with someone, and think the world will beat a path to their
website.
In poker, the serious gamblers know if you don't have the cost
of the ante, you can't expect to win. The same rule governs
advertising - you should not be in a business unless you have
sufficient resources, to at least have a chance of success.
One of my regular surprises is a startup business, which has not
planned for the costs of regular, on-going contact with their
prospects - advertising. One doesn't have to know a lot about
the market to spot a loser in this category -- if a business has
no war chest for marketing, it will fail. It's just a question of
how long it takes, and how much it ultimately costs.
A sure sign of impending failure, is what I refer to as the "zero
cost" syndrome. Even a cursory look at your email will give you
enough examples. Someone, usually new to computers, joins an ISP
such as AOL, and find they are getting a lot of ads in their
email. Many of these ads promise great riches with little or no
work, and they get hooked.
They have heard however about spamming, so they find a free email
provider - who cares if they lose that. They get some free web
space - why not, the cost is right - and they are in business, or
so they think.
Ad budgeting is one measure of commitment. No banker knowingly
backs a new venture without the resources to succeed. A business
with a limited budget to sell its product or services, must
survive on word of mouth, the slowest and least reliable of all
the media available.
Those who advertise for a living ask for enough money to get the
job done. Remember, the QUALITY of the advertising is not
affected by the budget, only the QUANTITY purchased at a
particular time.
The Internet is extremely impersonal, and people look for clues
when considering a purchase. A "zero cost" type of operation
raises a huge "red flag" and will seldom succeed. Would you send
off your hard earned money to someone with a Post Office Box and
a free email account? I know I wouldn't.
The minimum you should have is your own domain with your own
email address. You can forward that address to your ISP address,
or better yet, use an email client such as Eudora or Pegasus
which allows you to maintain a professional email address.
If you can't afford these minimum costs, and some consistent
advertising, you don't have the "ante" and don't belong in the
game. Someone may survive on word of mouth with a low overhead
business in the "brick and mortar" world, but the person with the
"zero cost" online business is simply wasting their time.
About the Author
Bob publishes the free weekly "Your Business" Newsletter
Visit his Web Site at http://adv-marketing.com/business to
subscribe and place a Free Ad for your business.
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