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How Much Is Enough?Home > Promote > Advertising > Articles 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 start-up ventures. People sign up as an affiliate with
someone, and think the world will beat a path to their Web site.
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 start-up business,
which has not planned for the costs of regular, ongoing 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. |
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