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Marketing in Small Companies

Small businesses face challenges such as limited resources, lack of name recognition, and difficulties adapting to changes. However, they also have advantages such as low startup costs, ability to serve niche markets, and independence. Marketing is important for small businesses to find new customers, and internet marketing methods like search engine optimization, websites, social media, and blogging can help on a limited budget. Obtaining financing, managing costs, and joining advocacy groups can also help small businesses address problems and contribute to the economy.

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62 views19 pages

Marketing in Small Companies

Small businesses face challenges such as limited resources, lack of name recognition, and difficulties adapting to changes. However, they also have advantages such as low startup costs, ability to serve niche markets, and independence. Marketing is important for small businesses to find new customers, and internet marketing methods like search engine optimization, websites, social media, and blogging can help on a limited budget. Obtaining financing, managing costs, and joining advocacy groups can also help small businesses address problems and contribute to the economy.

Uploaded by

vinccycp
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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MARKETING

IN SMALL
COMPANIES
Definition:

A small business is a business that is privately owned and


operated, with a small number of employees and relatively
low volume of sales. Small businesses are normally
privately owned corporations, partnerships,, or sole
proprietorships
Advantage:

•A small business can be started at a very low cost and on a part-


time basis. Small business is also well suited to internet
marketing because it can easily serve specialized niches,
something that would have been more difficult prior to the
internet revolution which began in the late 1990s.

•Adapting to change is crucial in business and particularly small


business; not being tied to any bureaucratic inertia, it is typically
easier to respond to the marketplace quickly.
•Small business proprietors tend to be intimate with their
customers and clients which results in greater accountability
and maturity.

•Independence is another advantage of owning a small


business.

•One survey of small business owners showed that 38% of


those who left their jobs
at other companies said their
main reason for leaving was
that they wanted to be their
own bosses.
•However, entrepreneurs have to work very long hours
and understand that ultimately their customers are their
bosses.

•Several organizations also provide help for the small


business sector, such as the Internal Revenue Service's
Marketing the small biz.
Finding new customers is the major challenge for Small
business owners. Small businesses typically find
themselves strapped for time but in order to create a
continual stream of new business, they must work on
marketing their business every day.
•Many small business owners find internet marketing
more affordable. Google AdWords and Yahoo! Search
Marketing are two popular options of getting small
business products or services in front of motivated Web
searchers.

•Successful online small business marketers are also


adept at utilizing the most relevant keywords in their site
content.
Creating a business Web site has become increasingly
affordable with many do-it-yourself programs now
available for beginners.

A Web site can provide significant marketing exposure


for small businesses when marketed through the Internet
and other channels. Some popular services are
WordPress, Joomla and Squarespace.

Advertising on niche sites can also be effective, but with


the long tail of the internet, it can be time intensive to
advertise on enough sites to garner an effective reach.
Social media has proven to be very useful in gaining
additional exposure for many small businesses. Many
small business owners use Facebook and Twitter as a way
to reach out to their loyal customers to give them news
about specials of the day or special coupons and generate
repeat business.
•This can be done with a proprietary blog and/or by using a
backlink strategy wherein the marketer comments on other
blogs and leaves a link to the small business' own Web site.

•A solid public relations strategy that utilizes speaking


engagements, press releases, feature stories, events and
sponsorships can also be a very
cost-effective way to build a loyal
following for a small business.
Problems faced by small businesses
Small businesses often face a variety of problems related to their size.
A frequent cause of bankruptcy is undercapitalization.

This is often a result of poor planning rather than economic conditions


- it is common rule of thumb that the entrepreneur should have access
to a sum of money at least equal to the projected revenue for the first
year of business in addition to his anticipated expenses.

For example, if the prospective owner thinks


that he will generate $100,000 in revenues
in the first year with $150,000 in start-up
expenses, then he should have no less than
$250,000 available.
•In the United States, some of the largest concerns of small business
owners are insurance costs (such as liability and health), rising
energy costs and taxes. In the United Kingdom and Australia, small
business owners tend to be more concerned with excessive
governmental red tape.

•Another problem for many small businesses is termed the


'Entrepreneurial Myth' or E-Myth. The mythic assumption is that an
expert in a given technical field will also be expert at running that
kind of business.

•Additional business management skills are needed to keep a


business running smoothly.

•Still another problem for many small businesses is the capacity of


much larger businesses to influence or sometimes determine their
chances for success
Franchise businesses

Franchising is a way for small business owners to benefit from the


economies of scale of the big corporation (franchiser). McDonald's
restaurants, TrueValue hardware stores, and NAPA Auto Parts
stores are examples of a franchise. The small business owner can
leverage a strong brand name
and purchasing power of the
larger company while keeping
their own investment
affordable.
However, some franchisees conclude that they suffer the "worst
of both worlds" feeling they are too restricted by corporate
mandates and lack true independence.

However, in some chains, such as the aforementioned TrueValue


and NAPA, franchises may have their own name alongside the
franchise's name.
Certification and trust

•Building trust with new customers can be a difficult task for a new
and establishing business.

•Some organizations like the Better Business Bureau and the


International Charter now offer Small Business Certification,
which certifies the quality of the services and goods produced and
can encourage new and larger customers.

•These services may require a few hours of work, but a


certification may reassure potential
customers.
Contribution to the economy

•In the US, small business (less than 500 employees) accounts for around
half the GDP and more than half the employment.

•Regarding small business, the top job provider is those with less than 10
employees, and those with 10 or more but less than 20 employees comes
in as the second, and those with 20 or more but less than 100 employees
comes in as the third (interpolation of data from the following
references).

• The most recent data shows firms with less than 20 employees account
for slightly more than 18% of the employment.

•Of the 5,369,068 employer firms in 1995, 78.8 percent had fewer than
10 employees, and 99.7 percent had fewer than 500 employees
Sources of funding

•Small businesses use several sources available for start-up


capital.
•Self-financing by the owner through cash, equity loan on his or
her home, and or other assets.
•Loans from friends or relatives
•Grants from private foundations
•Personal Savings
•Private stock issue
•Forming partnerships
•Angel Investors
•Banks
Business Networks and Advocacy Groups

Small businesses often join or come together to form


organizations to advocate for their causes or to achieve economies
of scale that larger businesses benefit from, such as the
opportunity to buy cheaper health insurance in bulk.

These organizations include local


or regional groups such as Chambers
of Commerce, as well as national or
international industry-specific
organizations.
Thank You

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