Create a marketing plan with clear-cut goals and a smart budget.
Whether your target audience for your home-based business are called customers, clients, patients, or prospects, you need to determine who they are and how you’ll connect with them to sell your products or services. To paraphrase a line from Field of Dreams: just because you built it doesn’t mean they’ll come. You have to be proactive and systematic in reaching out to customers and you have to be smart with your marketing dollars.
Making a Marketing Plan
A marketing plan is a formal document describing your advertising and marketing efforts. Like a business plan, you don’t need a well written print copy of your ideas. You do need to think through each and every aspect of marketing so you can have a blueprint for your actions going forward. You’ve already done some market research in nailing down the type of business you’ve decided to run. Now you need to get into the details of how you’re going to make that business successful.
“ Be sure that you can easily and quickly explain what your business is all about. ”
Elevator speech. Be sure that you can easily and quickly explain what your business is all about. It may be helpful to think in terms of giving a one- or two-sentence explanation to someone you’d meet in an elevator (hence the term elevator speech). This should include:
• What you do
• Why what you do is needed
For example, if your home-based business offers bookkeeping services, your speech might be something like: “We provide expert bookkeeping services for your business, which we can do remotely at your convenience to help your business save money.”
Identify your marketing challenges. What problems are you facing? This could be stiff competition, changing customer demand, or something else. By honing in on problems, you are forced to think about ways to overcome them. For example, if there’s another business offering essentially the same services as you, think how you can differentiate yourself.
Goals. Your marketing plan should include goals you hope to achieve within a set period. For example, your goals may be a revenue target for the next quarter or gaining a certain number of new clients by the end of the year.
The goals are meant to keep you focused on what you’re trying to achieve. Check your progress against your goals so you can adjust your marketing efforts. If you exceed your goals, what did you do right? Set new goals. If you fell short, what did you do wrong? You don’t want to continue doing the same thing if it fails to produce the desired results.
Identifying Your Customers
As part of your marketing plan, you need know your target audience. Who are your prospective customers? It’s not simply everyone out there. You need to define which businesses or people are most likely to need your products or services.
Start by determining whether your activities are more likely to be geared toward consumers or to businesses (B2B). Then hone your target audience by profiling them. Consider such characteristics as:
• Economic status
Setting Your Prices
It may sound funny to suggest that setting your prices is part of your marketing strategy, but it’s true. Your prices say a lot about your business. If you set your prices on the high end, you suggest that your business is elite and your advertising and other marketing efforts have to fall in line. On the other hand, if you’re going to be cut-rate, you need to reflect this in your marketing efforts. Bottom line here is that you need a pricing policy (your general approach to pricing) and strategy (specific ways to use pricing, such as discounting them to move inventory) to best reflect your business.
Prices say a lot about a business.
Be sure your pricing is realistic. It must be sufficient to cover your costs and generate a profit…the reason you’re in business. One of the biggest mistakes that many home-based business owners make is underpricing…charging less than they could, or should. This can result from having less overhead than non-home-based businesses. More often, it results from underappreciating what you offer the public.
Some pricing policies to consider:
• Competition-based pricing. Here, you set your prices in line with your competitors. You may want to be lower, or higher, than them.
• Cost-based pricing. Set your price by looking at your fixed and variable costs. Add a profit margin, the average of which varies greatly by industry. Let’s say you add 5% or 10% to your costs.
• Demand-based pricing. This pricing strategy is based on the level of demand. Pricing using this approach may be greater than a cost-based approach.
• Value-based pricing. If you set your prices using value-based pricing, it reflects the benefit perceived by the public for your product or service. Pricing using this approach may also be greater than a cost-based approach.
Pricing is a complicated matter, and merely choosing an approach isn’t enough. Fees for services are almost always in round numbers, but merchandise is another thing. You have to know when to cut your prices (hold sales) or offer volume discounts.
And, as an overall approach, are you going to use odd or even pricing? This means charging $1 or 99¢. It’s a minute difference in price, but a huge difference in marketing. It’s a matter of psychology and how the public perceives your business based on pricing. Upscale items usually use even pricing, while discounted items (which may be perceived as good value) rely on odd pricing. (The majority of prices for goods is an odd number.) But you can decide for yourself.
Once you know who to market to and what you’re going to charge, you need a game plan to begin reaching out to the public. Marketing strategies include (but are not limited to):
• Advertising. These are messages you use to influence potential customers.
“ One of the biggest mistakes that many home-based business owners make is underpricing. ”
Typically, advertising is something you pay for. Various advertising venues are discussed later.
• Branding. This is the practice of getting your business identified and differentiated from others. You may be recognized from your logo, your product, or your company name. For example, you can become a recognized expert in your field by posting blogs on your own website, Facebook, or other sites to gain exposure and brand yourself accordingly.
• Customer relationship management (CRM). This is a technology for managing your customers and prospects. There are numerous CRM options, including SalesForce (https://www.salesforce.com/), Freshsales (https://www.freshworks.com/freshsales-crm/), and PipeDrive (https://www.pipedrive.com/). You may not necessarily need to use CRM; it depends on the nature of your business.
• Pricing (discussed earlier).
• Product management. This is all things related to handling the lifecycle of items you sell. Product management includes promotions and supply chain management.
• Public relations. This is the maintenance of a favorable public image. For example, if you get involved in a local charity and the charity’s event is covered by your local newspaper in which your business is mentioned, this enhances your company’s favorable image.
• Search engine optimization (SEO). This is techniques for increasing traffic to a website. The use of a website for your business is discussed later.
Your marketing strategy should be scheduled for success. You want to spend your advertising dollars at a time when this is mostly likely to produce results. For example, if you are largely a seasonable business, such as tax return preparation, you probably want to advertise at the start of tax season…the time when potential clients are looking for tax return preparers.
A website is vital for establishing a presence.
Does the nature of your business require you to have your own website? You may want or need one as an online store from which to sell your wares. Or a website can be used as an online brochure to feature what you do and provide contact information for customers. Of course, you may be able to sidestep having a website, at least at the start, by using Facebook or other social media platforms, or by selling directly through an online portal, such as Etsy or eBay.
If you need or want a website, you’ve probably already thought about or secured your domain name. This is your URL…your online address. Now it’s up to you get the website that meets your business needs and is within your budget.
DIY website. You may be able to create a website yourself, which obviously saves you considerable dollars. Sites that enable you to do this include:
• Squarespace (https://www.squarespace.com /)
• SiteBuilder (https://www.sitebuilder.com /)
• WordPress (https://wordpress.org/plugins/wp-pagebuilder /)
The one you choose from the list above or other such companies depends on your needs. For example, if you’re selling a product through your website, then Square-Space may be preferable because it offers a shopping cart. If you’re using the site as a brochure for your business, then Word-Press may be sufficient.
In building your site, give consideration to:
• Security. You want to be sure your site includes Secure Socket Layers (SSL). This is essential if you’re transacting business through your site. You’ll know whether you’re secure if the URL includes https (sites without SSL are unsecured and display http). An SSL may be built into the cost of your website creation.
• Mobile friendly. You want your website to display well not only on a laptop but also on tablets and cellphones.
• Disability access. You want your site to be accessible by those with a disability. You can test your site for this access with WebAccessibility (https://www.webaccessibility.com/).
“ You want your site to be accessible by those with a disability. ”
Custom-built website. Depending on the nature of your business, your budget, and your own abilities, you may prefer to use a professional developer to build your website. The cost of a professional developer varies greatly, depending in part on the complexity of your site (the features you want) and the expertise of the developer. You may spend $5,000, $10,000, or more to get the site you want.
In working with a professional developer, be sure to inquire about:
• Marketing concerns. Is SEO being built into your site?
• Site changes. You want to be able to make changes to the site on your own (e.g., updating product displays, sales, blogs).
Site hosting. Whether you create your site by yourself or use a professional developer, you need a home for your website, and this is the company acting as your web host. There are various ways to have a host. For example, there’s shared webhosting, which is affordable as compared with dedicated hosting.
You may want to have an app for your business (perhaps not to start, but down the road). A customer utility app can be used to create an instant connection with customers who have installed your app on their device. You can use an app to:
• Build your brand
• Engage with customers
• Get feedback (e.g., encourage a testimonial or review)
• Promote your product or services
• Publicize a sale
• Share information
The cost for an app developer varies greatly, just like a website developer. It depends on the app’s features and more. Is it possible to get this done for $1,000? Yes, but it may be more limited than you’d prefer. And there may be other costs to consider in having a website (e.g., getting into the Apple Store; hosting for the app).
Social Media Strategy
Social media debuted more than 20 years ago and continues to be an important aspect of marketing. According to TheManifest (https://themanifest.com/advertising/small-business-advertising-spending-2019), nearly half of all small businesses finds social media to be their most effective medium for achieving their advertising goals.
You can use social media platforms to:
• Build your brand (explained earlier)
• Drive traffic to your website
• Promote products or services to increase sales
There are a number of important social media sites used by small businesses. You can use one or more of them, as your time permits. The most popular social media options for businesses are:
• Facebook (https://www.facebook.com/business ), the most popular social media site by far, can help your business grow by using best practices for your posts here. There’s guidance on these best practices (https://www.facebook.com/business/ learn/lessons/improving-businesswith-facebook-posts), including frequency of posting, finding content that followers care about, and getting your posts in News Feed. There’s a series of free courses to learn more about using Facebook to market your business.
• Instagram (https://business.instagram.com/getting-started ) also supports business marketing to help you stand out. Create a business profile, post content, and generate buzz for your activities.
• LinkedIn (https://business.linkedin.com/marketing-solutions/linkedinpages) is probably less about marketing to consumers and more about just connecting with other business owners. You can use this site to share information and gain credibility for you and your business. It’s a great option if your activities are B2B.
• Pinterest (https://business.pinterest.com/) can be used to influence consumers to buy from you. This site helps you establish your brand.
• Snapchat (https://businesshelp.snapchat.com/en-US/a/set-upsnapchat) is a site widely used by millennials, so it could be a good marketing tool if this is your target audience. Use your seconds-long video posts on this site to feature your products and events. By creating a business account, you can advertise with Snapchat.
“ You don’t have to be a movie producer to create good tutorials that you can post on your website or YouTube. ”
• Twitter (https://business.twitter.com/en/basics/create-a-twitter-business-profile.html) allows you to follow the conversation about topics and trends as well as showcase your content and message. As you build followers, you can reach out to them to share information. You may also read remarks concerning your business, which you can then address.
• YouTube (https://www.youtube.com/channel/UCwzySbzUWiKqG84jOnbeB1w/about) lets you post instructional materials to help establish your brand and you as the expert. For example, if your home-based business is custom attire, you can create a how-to video on choosing a style that works for you. And you can advertise through YouTube Video Ads.
Consider using a social media management tool to schedule and coordinate your efforts across different platforms. Some options:
Other Marketing Strategies
The strategies discussed above are not exclusive. There are many other ways to connect with customers. Here are some to consider:
• Networking. This is a process of connecting with others in order to build relationships with the hopes of later receiving business or at least referrals. Just because you work from home doesn’t mean you’re limited in networking. Find opportunities through your local chamber of commerce or join a business group, such as BNI (https://www.bni.com/), MeetUp for Professional Networking (https://www.meetup.com/topics/professional-networking/), and Toastmasters (https://www.toastmasters.org/).
• Referrals. Your satisfied customers are your best spokespeople. If you can get them to engage in word-of-mouth advertising, you’re all set. Ask for referrals. Consider rewarding customers who refer others to you with discounts, gifts, or other thank-you methods.
• Tutorials. You don’t have to be a movie producer to create good tutorials that you can post on your website or YouTube. You’re providing help to viewers and directing them to your business.
• Email marketing. Once you build a list of customers, you can then reach out to them through email. Learn more from Constant Contact (https:// www.constantcontact.com/index.jsp).
Making a Marketing Budget
It’s hard to pin down a rule of thumb for what you should spend on marketing. Some experts suggest only 1% of revenues, while others say 5% or more. Likely you need to spend more if you’re targeting consumers versus business customers. As a home-based business, and a start-up at that, you’re not likely to use a marketing company to help you. But you will incur various costs in your marketing efforts. Some costs to factor in:
• Paid ads (below)
• Social media management tools
• PR if you use a professional
Paid ads. Decide now where you want to advertise (locally; digitally) and what you can afford to pay for paid ads. There are many options for online advertising, all of which can be used by a business of any size and can be structured to track the effectiveness of your efforts.
Online advertising efforts usually are done through pay-per-click (PPC), which you pay an amount based on the number of clicks your ad receives, or a fixed rate, where you pay a set amount up front.
Consider these online ad options:
• Google Ads (https://ads.google.com/home/), which appear in the search results. HubSpot has a free guide to Google Ads for 2020 (https://blog.hubspot.com/marketing/googleadwords-ppc), which explains what they are and how to use them for your business.
• Display Ads, which are the typical ads that appear as banners on web pages. There’s a guide to display ads from Acquisio (https://www.acquisio.com/blog/agency/what-are-displayads-5-steps-to-effective-visualadvertising/).
• Business Directories, such as Yelp (https://biz.yelp.com/).
• Social media advertising using Facebook Ads (https://www.facebook.com/business/ads) or Twitter Ads (https://business.twitter.com/en/solutions/twitter-ads.html).
Oversee your results. Like most everything else in your business, you need to continually check results and adapt your marketing budget accordingly. To the greatest extent possible, monitor your ROI (return on investment) by tracking the leads or sales as they relate to ads or other marketing efforts.
Barbara Weltman is an attorney, prolific author, and a trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of Idea of the Day® and monthly e-newsletter Big Ideas for Small Business® at BigIdeasForSmallBusiness.com. She has been named one of the Top 100 Small Business Influencers five years in a row and has won numerous awards for her blog. You can follow her on Twitter @ Bigideas4SB.