Do Business Well

Creating a public image has become an essential part of any sales effort. Advertising and promotion/public relations are usually the means of making this happen.

Advertising is fairly straightforward. You decide where youwant your business to advertise, determine the rates, and calculate the costs. For well-established companies, advertising can be very important, and the business plan should account for how much will be spent.

For start-up and early-stage companies, advertising is often too costly. Fortunately, promotion and public relations are much like home remodeling—they can be done either by outside professionals or by business owners on a do-it-yourself basis. When done in the latter way, the cash outlay can be minimal. Of course, even companies that advertise are well advised to use promotion and public relations techniques. What follows are some approaches for planning your promotion and public relations effort as part of the sales section of the business plan.

Promotional opportunities. The beautiful thing about promotion is that you can be a one-person show and give the impression of being a substantial company. How do you do that? By using the media. If Your company is written up favorably in a newspaper or magazine article, you gain much more credibility than you do through any advertising. And best of all, it’s free. The first step in effective promotion is targeting which market you want to reach and determining which media reach it.

If you want to reach plastics manufacturers, there are several magazines and newsletters targeted to that market. If you want to reach the personnel employment agency market, you will find a number of publications that serve that market.

Indeed, for any industry you can name, there are invariably several magazines and/or newsletters being read by major players in that field.

Will they take your material? Believe it or not, editors are looking for stories and are sometimes desperate for stories. Having worked on that side of the fence, I can tell you that the deadlines never let up. There’s always the next issue to fill, and many entrepreneurs are pleasantly surprised by how easy it is to get articles into a trade publication.

Another potentially useful promotional tool is trade shows. It’s possible through the effective use of displays and exhibits to give the impression of being a more substantial company than you are. Remember, though, that trade shows can get expensive when you figure in travel, exhibit space rental, displays, and the cost of management time spent at the show.

Your business plan should give some indication of the scope of your promotional effort—the publications you plan to target and the kind of material you plan to present. News releases, of course, are basic. Cultivating personal relationships with industry editors is also important.

What about PR firms? It’s easy to opt out of the do-it-yourself approach and hire a public relations firm to handle promotional efforts. The only problem with that is it’s expensive— typically $3,000 to $4,000 monthly—and the work may not get done as effectively as when the company’s officials are actively involved. Press people often prefer to deal directly with company executives rather than with an intermediary like a public relations specialist.

The downside to doing your own PR, of course, is that it takes time and energy that could be devoted to running the business.

Your business plan should specify which promotional approach you’ll take, since the decision to go with a professional PR firm will involve planning for the expenditure.

Making your promotion productive. When inquiries come in as a result of publicity, your challenge is to determine not only whether the inquiry is serious, but just how serious. One way to do that is to rate the inquiries on a 1-to-4 scale, as follows:

1. Immediate prospect. Needs product/service yesterday.
2. Near-term prospect.
3. Long-term prospect. We’re thinking about committing.
4. Informational prospect. We want the information for our file.

You then plan your most intense follow-up sales efforts for those falling into the first two categories.

More about: How Will You Promote Your Product or Service?

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• Managing your promotions
• Expenditure on Advertising: Would I have made more Profit if I had Spent less on Advertising? (1-9)
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