One of the most important and most misunderstood aspects of making your small business successful is proper marketing. Marketing is a very broad subject that may include everything from promotional ink pens to television commercials. Many small businesses have a difficult time figuring out when and how to properly spend their marketing dollars and unfortunately fewer and fewer advertising “professionals” understand it any better than the small business owner.

One of the first things every small business should understand is that without properly advertising and marketing your business, it will be much more difficult to be as successful as you could be. A proper marketing plan will help you know in advance how much you need to spend, when to spend it and what to spend it on. The marketing needs of every business is unique but some basic principles apply no matter what your profession is.

What type of advertising do you need?

One of the most important things to understand about advertising your business is deciding what type of advertising you need. By this I don’t mean newspaper, radio, television, internet, etc… I’m actually referring to the ads themselves. There are two major categories of advertising: image ads, or brand awareness, and sales driving ads.

Image ads are designed to not necessarily bring customers in the door today but to build the image of your business as the one to call when they need your products. Image ads generally tell basic information about your business and have a strong branding element to attract a customer’s attention. The advantage of image ads is they build awareness of your company or product and position you as the leader in your field. The disadvantage is that image ads don’t generally have a strong call to action to get customers coming in the door today. Image ads generally require a higher level of repetition and the effectiveness builds over time.

Sales driving ads are designed with a strong call to action (50% Off) and are intended to bring customers in the door immediately. A prime example of a sales driving ad are the Black Friday ads you see every year. These ads have a strong call to action to get customers in the door and are designed for a quick sell but are not really effective in positioning the business long term as a leader in their industry. The advantage of sales driving ads are that they get customers in the door or on the phone quickly and help you bring dollars in right away. The biggest disadvantage to these types of ad is that they have much less of a branding capacity for your business and only appeal to the people who are in the market for your products or services at the time the ads are running.

Image ads tend to have a much more long term effect on your business and build a customer base slowly over time. Sales driving ads show more immediate results but generally don’t work as well to build your long term customer base. Both ads have their place in any marketing plan and need to be properly planned for when they work best for your business.

When should you do most of your advertising?

This may be the area more small businesses make their marketing mistakes than any other single area. Most business owners make the mistake of advertising when they are busy and holding off when things are slow. Every product and service has a natural sales cycle throughout the year and no matter how much money you spend you won’t change that. Boat dealers are going to have a huge increase in sales prior to and during the summer months and sales will be lower during the winter months for example. You can spend $200,000 on advertising and you still will have the same business cycle.

Knowing when your sales cycles are is paramount to properly planning your advertising and marketing for your business. When looking at your sales cycles your biggest advertising push should not be at your peak sales time, you’re going to have good sales at this time already. Your big advertising push should be right as you’re coming out of your slowest time and starting to build toward the “good times.”

This does not however mean you should quit marketing during your busy times. Positioning your business as the leader in your field is a 365 day per year commitment. If you ever let up, you can be sure your competitors will do their best to move in and take over your position. Developing a strong brand for your business and reaching your potential customers helps build brand loyalty when they’re ready to make a purchase. This is the reason major companies like Wal-Mart, Target, Toyota, Chevrolet, etc.. continue to spend enormous amounts of money advertising. If you ever think you can stop advertising because “everyone knows me,” just ask yourself if more people know your business than Chevrolet or Nike.

When looking at your sales cycles throughout the year, if you’re advertising only at the time everyone is ready to start buying, you’ve missed a good percentage of the customers. Depending on the price of your product or service, your customers may start their decision making process a few months ahead of the time to actually purchase. Few people walk in to spend $30,000 on a new boat without already having researched their options. If you’ve only advertised during the peak buying time, they’ve been researching with your competitors and have already built some brand loyalty with them instead of you. This is why you want to plan your advertising to start its heaviest push at the beginning of the sales climb. During the peak of your sales period you still need to be advertising to get those late decision makers. When your sales cycle begins to decline is a good time to run your image ads to keep your name in front of your customers and continue branding yourself as the leader in your industry.

When it comes to advertising, perception is everything. If your customers see you advertising regularly and your competitors only advertise once or twice a year, the natural inclination is to think that your business must be more successful since you are able to keep your advertising in front of your customers year round. People naturally want to do business with successful companies.

One of the challenges I see frequently when meeting with solo-entrepreneurs who have been in business for less than 5 years and are trying to build a solid business, is an inability to ensure that they get to keep a significant amount of the money that they earn. Most people who start a business fail to understand the significance of creating and managing a budget, largely because they don’t have a budget in their personal lives. I’ve heard it said recently that “how you do money is how you do everything.”

Typically new entrepreneurs earn and spend, sometimes without ever letting the money they earn get appropriated to their business account. Did you catch that? Yes, I am talking about embezzling from your business. Sadly, most entrepreneurs do not have a business background and often start their business out of necessity, lacking the skills, strategies and solutions to ensure that they are building a thriving enterprise. Most people live in a “feast or famine” environment or worst yet, they live from paycheck to paycheck or what I call “poor-check to poor-check” completely captive to their business and clients instead of being able to allow abundance to flow in all they do.

When this is the way you run your business, you are likely to never gain the freedom to enjoy what you love. In my opinion, that completely defeats the purpose of becoming an entrepreneur. If you’re going to be a slave to your work, you might as well keep working a job. If this makes your stomach curl, then you’ve got to get a handle on your money so that you can ensure you never have to sit behind someone else’s desk ever again.

If you want to stop embezzling from your business, you have to change your mindset. Keep in mind that with business comes boundaries. If your business is considered a business on your deepest levels, you will respond accordingly. It will also take discipline. That means, you will have to stop taking cash out of your business before it enters your bank account. While I am happy to suggest that you pay yourself, I do recommend that you pay yourself in an authentic fashion, via your business checking account, so that you have a record of the salary you are paying yourself.

I am happy to report that as soon as you shift your mindset and you also create a few key financial systems in your business, you can go from surviving to thriving in your business. When you’re no longer focusing on the lack present in your business, you can actually attract more paying clients because your energy will be flowing in abundance and circulation instead of in lack and stagnation.

I believe that since you started a business to make money, you should create effective systems so that what you make doesn’t get embezzled by poor financial management habits. While I am not a financial advisor, I am a business coach and I am able to show my clients how to create foundational financial management for their business, a consistent strategy as they endeavor to grow their business. I also recommend that you consult a financial advisor that specializes in working with entrepreneurs so that you can be sure to get a customized strategy that will increase cash flow and reduce stress as you endeavor to grow your business.

Here are 5 keys to create a thriving business with cash flow:

1. Know your numbers. You have to know what you are bringing in, what’s going out and what’s left over. You have to know the value of a new client to your bottom line and how many you plan to add in any given month.
2. Make a monthly financial plan for your business. Set a budget for the expenses that you know are mandatory to the operations of your business for the current month. In your plan, highlight the amount of revenue you have coming in before you do anything to attract new clients. Also track the amount of expenses you have going out so that you know what your cash flow is.
3. Create a strategy to attract enough new clients to handle all of the expenses you already have in your business. As an example, if you need $5,000 to run your business each month and you currently have $7,500 in your business checking account, which would mean you have $2,500 cash flow in your business. If you create a strategy to attract 3 new clients which are valued at $7,500, you will have $5,000 cash flow in your business when your month is done. With the extra cash flow, you can begin to save money by opening a business savings account and having money set aside for personal development such as hiring a business coach, other investments, expanding your team, etc.
4. Purchase financial management software such as QuickBooks to keep track of your expenses, income, invoicing and clients. The system is designed to make managing your businesses financial systems easier so that you can spend more time doing what you love, working with your clients.
5. Run your monthly reports by the 3^rd business day of the new month so that you can see where you are and brainstorm how you can increase your results by a minimum of 10% in the new month.

Embezzlement is a serious offense. When you embezzle from your business, you minimize your ability to invest in yourself through your business when the need arises and you aren’t allowed to show up fully for your clients. By simply creating a budget and financial plan, you can reduce those inappropriate expenses and begin to allow your business to truly change lives.