It's the chicken/egg syndrome of start-up: You need to spend money to bring in customers, but you don't have money to spend until you get customers. Too often, new business owners treat marketing as an optional expense. The truth is, if you don't dedicate an adequate budget of time and money to marketing, it's unlikely you'll attract enough customers to sustain and grow your venture.

The good news is, many small businesses have successfully marketed themselves on a shoestring. By applying creative solutions to marketing challenges, you can get the word out to prospective customers without going for broke. Simply keep in mind these seven secrets to successful small-budget marketing, and you'll be well on your way to big-time results.

1. Have a game plan. By creating a marketing plan that includes goals, vehicles and budgets for time and money, you gain significant advantages. Planning six to 12 months ahead gives you a broader view of your marketing needs and expenditures. Use that information to take advantage of volume discounts on advertising, services and printing by committing to a schedule in advance. You may also be able to negotiate longer payment terms on products and services related to promoting your business. Most important, a plan will help you stay focused, and you'll be less likely to make purchases that aren't in your company's best interest.

Chris Larson learned about the importance of marketing focus when he launched O'Plenty Animation Studio in 1990. Because he launched his studio on the New Jersey shore, an unlikely place to find a character animation company, it was easy for O'Plenty to capture the attention of local media. Larson found efforts not targeted toward specific niche markets-TV producers, corporate advertising executives and animation producers-drew in large numbers of unqualified leads.

"Sticking with a plan helped us avoid marketing opportunities that would cost us a lot of time," says Larson, 35. "The more focused we stayed, the less we had to deal with that."

News releases about new productions and new hires are sent only to the trade media that his best prospects read. And low-cost demo reels of work his studio has produced for other clients routinely capture interest in his company.

2. Sell yourself. As you craft a plan, become your own toughest customer. Ask yourself why you should invest in each marketing opportunity. Does it hit your target? Is it cost-efficient? What will it do for your business? If your idea doesn't pass with flying colors, rethink it.

The Most for Your Efforts

3. Get good "marketing mileage." Elevate your efforts so they include many opportunities for attention. When Daryl Lynn O'Connell, 38, opened Anita's Joy Gift Shoppe, she saw the value of working with charities. But rather than just cutting a check, O'Connell makes events out of their fund-raisers. The charities get a forum for raising money and cultivating relationships, and each soiree brings customers into the shop.

Besides using news releases, O'Connell publicizes events by posting signs in her store, sends mail to her customer list and taps the charities to spread the word. Because she works with nonprofit organizations, her events get picked up as free public service announcements on radio stations. The result is more marketing mileage than she would have gained by merely making a donation. Since launching in 2000, Anita's Joy has moved to a bigger store in Manasquan, New Jersey. O'Connell believes her promotions played a large part in building her customer base. "When they realize they're taking part in a fund-raiser," she says, "they return again and again."

4. Partner up. By partnering with other businesses in your marketing efforts, you can expand your circle of influence and slash your budget. Jennifer Graham, 27, owner of Le Palais Boutique, a bridal shop in Grand Junction, Colorado, has teamed with a photographer and a florist to pass around each other's marketing materials. Because they all targeted the same market-brides-the arrangement boosted business as the three businesses referred and promoted each other.

Pounding the pavement for partners worked for 37-year-old Dawn Forrest Armstrong. Her Phoenix company, K-OS Designs produces reflective stickers for motorcycle and other helmets. Armstrong sought endorsement from national and international safety organizations and used their testimonials in her marketing, giving her credibility with prospects. The organizations also link to her Web site. The increased traffic has resulted in double-digit increases in annual sales.

5. Find diamonds in your own backyard. Every time you reach out to customers, you have an opportunity to reinforce your marketing message. By using vehicles you already have, you can increase your outreach and get more business from existing customers. For example, turn monthly bills into opportunities to mail buying suggestions based on past purchases or to share good news about your company.

When Boston-based Palladion Services Inc. received a coveted write-up in The Boston Globe, the company turned it into a promotional mailer. As a result of the company's reputation, built through its marketing and service, customers are often referred to Palladion. "When people make a referral, they want to be sure you're going to do the job well," explains partner and vice president Patrick Knight, 36. "By showing them we received this positive coverage, we reinforced the fact that our reputation is well-earned."

Within your place of business, you may have ample opportunity to inexpensively reach out to old and new customers. When Armstrong got her business started, she had little budget for trade-show space. Instead, she attended motorcycle rallies and handed out free samples of her product as a "gift" to those wearing or carrying their helmets.

"That started a dialogue about the product," she says. "I got great customer feedback and new ideas for a cost of about $50."

6. Keep your ego in check.< The adage "fake it until you make it" may be true for some things, but marketing spending is not one of them. Some entrepreneurs lose sight of what's effective when they let their egos dictate promotional spending. While a lavish grand opening party may be a great way to impress friends, it's a bad idea if you must cut back on activities that bring customers through the door. One New Jersey art gallery owner spent thousands on printed materials, but he was left so overextended that he didn't have money in his budget to publicize his business.

Similarly, don't be tempted to overspend when approached by advertising salespeople if the opportunity doesn't fit with your plan. Knight is contacted by advertising salespeople from media that aren't good vehicles for his company. "Who doesn't want to see their name up in lights?" he says. "But you have to say no if it's not the right fit."

7. Track results-and reinvest appropriately. Put tracking mechanisms in place to ensure your efforts are paying off. Some ways you can track customers:

  • Hold drawings for prizes. On the entry form, include a spot for patrons to fill in where they heard about your business.
  • Encourage employees to ask customers how they found your business. Graham's employees routinely ask (and record) how customers heard about the shop.
  • Imprint promotions and coupons with medium-specific codes.
  • Collect addresses for customers, and spot trends related to your marketing (i.e., an increase when you promote your business in a particular area).

Keeping these guidelines in mind can save you hundreds or even thousands of dollars on your marketing efforts and ensure the money you do invest is well-spent.

How Much Should You Spend?

Theories on how to set a marketing budget range from a certain percentage of net revenues to whatever is left after all the bills are paid. While there's no formula to tell you the "right" number, these guidelines can tell you whether you're in the ballpark.

1. Check out your competitors. With a bit of sleuthing, you can discover how your competitors are reaching their customers and estimate their expenditures. If their efforts appear to be working, you might consider matching their marketing dollars.

2. Find similar noncompeting businesses and find out what they're doing. Industry associations and even the Net are great ways to find people who do what you do in noncompeting markets. You may be surprised that many business owners are eager to help each other-especially when they're not vying for the same customers.

3. Budget more for a start-up. It takes more effort-and often, more money-to make a name for a new business.

4. Review your plan periodically and adjust your expenditures accordingly. Just because you have a plan doesn't mean your expenses are written in stone. Be sure to review how your marketing dollars and time are being spent to see what's working and what needs to be modified.

The bottom line when it comes to your marketing budget is-well, your bottom line. Be sure the amount you dedicate is going to be manageable for your business.

Marketing Mishaps to Avoid

While there are plenty of ways to mess up a marketing campaign, new business owners typically fall prey to four particular pitfalls:

1. Saying too much: When you jam too many messages into any one marketing vehicle, you risk losing your audience entirely. Focus on one or two key messages for each marketing effort.

2.Being inconsistent: If each piece of your print marketing materials looks as if it's from a different company, you're not likely to be effective.

3. Cutting your marketing budget first: When cash flow dips, it's more important than ever to keep up your promotional efforts. Don't be tempted to make marketing your first cut when it's time to slash expenditures.

4. Hiring a big agency with a small budget: Like most businesses, advertising, public relations and other marketing consulting agencies come in different sizes and price points. If you need to hire help on a shoestring, look for a small to midsized agency where your dollars and your business will be treated with the respect they deserve.


Gwen Moran helps small businesses with marketing through consulting and writing.