By Cheryl Frost
Marketing your small business requires preparation and planning. The more effort you put into your marketing strategy, the more successful your business will be. Take the time to dress up your company before announcing your formal presence. Proper planning is the most important step in marketing; part of this step involves having a catchy name to attract attention and setting prices that benefit both you and your customers.
Although the saying goes, “you can’t judge a book by its cover,” it happens all the time. The name of your business is the cover of your book; it will be judged, because it is your potential customers’ first impression of who you are and what you do. If you are an office supply dealer with a business name of “Curley’s Fun Stuff,” how will your customers relate your title to their needs? Maybe you had a puppy named Curley once, and you wanted to honor him and also make your business sound casual. That is great for fulfilling your needs, but it’s the customer you want to please, not your long lost puppy.
The name of your company should say as much as possible about your business in 2 to 5 words. Let’s say your name is Adam and you have an office supply company that specializes in both high quality and wide variety of paper products. “Adam’s Office and Paper” tells potential customers your name, what type of business you run, and that you specialize, somehow, in paper. It might not be an exciting title for you, but it is satisfying to the customer.
But you do not have to be boring when choosing your business name. You can be both creative and informative at the same time. Try a play on words, which entices people to read and reread your title. Grand Paws might be a good name for a pet grooming service, for example. This name plays on the glamorous paws of the animals, but also sounds like “grandpa.” People appreciate the extra effort businesses go through to come up with a clever name.
You’ve got a market and a name and a general idea of what you will sell—whether it is a service or a tangible product. Now you must determine how much you will charge.
Price is just as much a part of your marketing strategy as it is a business decision. Your prices must be competitive so you don’t scare away the customers. However, if you specialize in high quality goods or services, low cost might be less important to the customer. In this case, even high prices should be reasonable, which is what you would integrate into your sales pitch: High quality at reasonable rates.
The most important goal of your business, of course, is profit. You would like to have low enough prices to make your customers happy, but you have to consider your own costs to run the business.
To determine how much to charge for each item, you should have a formula to work out how much it costs to you (item plus overhead) and how much of a profit you can reasonably make.
Example: Black ink cartridges, purchased by you in bulk, 10 cases at a time. Resell them to the customer by the case:
One case of 24 black ink cartridges = $40
Markup percentage = 200%
Markup amount = $40 x 200% = $80
Cost + Markup = $120
Selling price = $120 per case.
Note that the $80 markup amount is not your profit. It should be enough to contribute toward overhead costs, such as wages, rent, and other business expenses, while still providing some margin of profit.
If “lowest price” is not the focal point of your business, following the MSRP is an easy way to set prices. Your prices would be average and fairly competitive. Using the MSRP would alleviate the task of crunching numbers in an attempt to always stay below or above the line.
The disadvantage of using a predetermined set of prices is that it does nothing for your company’s image. Even if price is not a consideration to your company’s edge, it is still something the customers weigh out. The manufacturer’s suggestion may not be competitive or even realistic in the current market. So although the MSRP is an option, it might be more beneficial to your reputation to put in the extra effort of calculating desirable prices yourself.
Of course, company name and prices are not the only features of a marketing plan. But they are the bookends of the strategy. You must be thoroughly prepared before marketing your business. Successful marketing always includes a good plan. Because without a plan, your business is likely to fail.