Missouri Small Business and Technology Development Centers Blog

Some of the latest research from the Kauffman Foundation puts even more data behind what we have known for a long time: job growth comes from young, growing firms and that, if we want job growth, then we need to have more of those firms.

There are a variety of ways to encourage that kind of growth, but the answer is not always more money. Small businesses don’t necessarily need loans, but they do need more customers. They need more sales. Hence, they need new markets.

Markets come in three types: domestic, government and international. A conversation with some state agency partners was very revealing in terms of what the state can do to help reach new markets, in particular, international markets. The Office of Business and Community Services within the Missouri Department of Economic Development has a staff of international marketing experts that can literally hold a company’s hand through the international marketing process.

Following a detailed assessment of the company, its potential markets and potential partners, the folks at DED will work side by side with Missouri companies to find the best match in terms of distributors overseas. They can advise on negotiations, pricing, payment and all of the many facets and subtleties of doing business with overseas partners. They advocate for the company as experienced consultants on the side. While I knew this sort of assistance must exist somewhere, it wasn’t until they walked me through what they actually do that I realized the value this must have for Missouri companies seeking to export.

Want to know more? Visit www.missouridevelopment.org, or call them at 573/751-4855.

John Wanamaker owned Philadelphia’s first and largest department store. Starting as an errand boy in a small retail establishment, in 1876, at the age of 38, he purchased an old depot and transformed it into a shopping revolution. But I’m thinking of him today because of what he said about marketing:

“Half the money I spend on advertising is wasted. The trouble is, I don’t which half.”

It’s a sad truth that the nation’s business owners will spend millions of dollars each month on marketing that doesn’t work. But how do you know?

Ask yourself these questions:

• Do you know how many qualified sales leads you will get next month?
• Do you know how much a customer is worth over the course of his or her lifetime?
• Do you know how much it costs to acquire a customer?

The creative part of marketing has not changed since John Wanamaker opened his legendary department store. The technology has changed. The tools have changed. Instead of a call to action including a “Call now…” line, you will be directed to a website. But the key to marketing — a relationship with the customer — has not changed, and never will.

Regardless of the tools you use, you need to:

• Grab your customer’s attention. Someone once told me the best way to do that is to write headlines like those that appear on the cover of Cosmopolitan magazine. Look at one in the grocery check-out line next time, and you’ll see what I mean.
• Provide good information. Use your copy to agitate the problem your product or service solves, then explain how it will. Talk to them in terms of their need, not your product or service.
• Make the customer an offer that is too good to refuse. Just telling your customers to “Call for more information” is not good enough. Make them a concrete, specific offer.

Stay tuned here for more information on how to use these three tips to generate leads from a variety of marketing strategies.

According to a poll conducted by American Express, nearly half of small business owners plan to make capital investments in their businesses this spring. That’s up 6 percent over about six months ago. Nearly 28 percent plan to hire new staff, up from 23 percent last fall. Although in general entrepreneurs are not feeling overly positive about the economic situation, there are a few, represented in the increasing numbers above, who must be doing something right. Just what is that?

Seems it boils down to cash flow. Which includes getting paid faster. More than 56 percent of growing firms report they generate enough revenue to cover working capital needs, while 33 percent feel they are just staying afloat and another 13 percent believe they may be captaining a sinking ship.

The growing firms indicate that only a few customers are taking more time to pay. One reason for that is faster-growing firms likely have online payment capabilities, which makes everything easier — and faster.

The business and personal services sector seems to have weathered the downturn better than other sectors. The firms that are only holding their own or in decline are most likely in the retail sector and — no surprise — construction.

A good many companies — some 64 percent — said the difficult conditions in which they find themselves have forced them to examine processes, streamline operations and examine management practices. Many report that they have cut spending on marketing and sales. And, many hiring decisions have been put on hold while owners opt instead for part-time workers or contractors for specific project.

Facilitating cash flow and running a lean machine appear to be keys to sustainability. In reality, those are good practices — not just in a time of economic challenges, but always.