What Can You do to Stay Ahead in the Industry and Remain Cost Effective?
Every year, there are businesses that will rise and fall, including those in the fire protection industry. New ones get established and take on competitors that have been in the game for a while. Some win and some lose; it’s the name of the game. According to this article, only 50% of businesses make it past the first five years, and ⅓ make it past the ten-year mark.
However, part of a company’s downfall can be the mere fact that they try so hard to stand out and spread their name through the right channels. Sometimes, doing this means that they end up losing more money than they can afford. They’re spending profits before they make them. This causes the business to sink before it can swim.
Regarding the fire protection industry, it’s even more imperative to stand out from the rest. So, ultimately, standing out is a critical part of a company’s success. Finding the balance between keeping ahead and being cost effective is a skill, but a learned one.
Improving the Quality of Your Industry Doesn’t Have to Break the Bank
First things first when establishing your business: set up a marketing budget. A planned budget keeps your team focused on specific goals, and makes sure you are staying efficient when it comes to managing costs. It’s a resource for your company to rely on. Statistically, up to 85% of small to mid-sized companies operate from a fixed budget. Focus on how to spend a defined budget rather than particular goals or strategies. A budget helps you look at the whole picture rather than a specific mindset or idea that could end up leading your business astray and damaging your budgeted expenses.
Typically, budgets cover the costs for advertisers, promotions, and public relations. It varies depending on the size of the business, it’s annual sales, and how much the competition is advertising for itself. Depending on the industry (beauty, marketing, culinary, etc.) those budgets can range from a low of 1% to a high of 30%. However, if it’s a new company, it may spend up to 50% of its sales for introductory marketing programs for the first year. That’s just how it goes.
Make Way… Save Room in Your Budget
So, what goes in the budget? What are you looking to do to make your company stand out from the rest? Has the company been around for a while, or is it newly establishing itself in the industry? These are important factors to consider when building your budget plan.
Consider your marketing and advertising…
The U.S Small Business Administration recommends spending 7-8% or your gross revenue for marketing and advertising if you generation less than 5 million a year in sales.
You want to make sure you include:
- Print and broadcasting advertisement
- Design and printing costs for print materials (newsletters, direct mail, etc.)
- Website development
- Public relations
- Trade shows (Conventions for latest tech development, etc.)
- Any other special events (company parties, holiday events, birthdays, etc.)
Next, determine the number of dollars for each category.
How much are you willing to spend? Each budget is different, depending on what your company needs and wants for their budget. And while these are all based on each individual company, there are still common methods of budgets available to help you set up a template for your budget.
What Budgets are Out There to Help Fire Protection Businesses Remain Cost Effective?
Here are all the common methods of budgets that you can use to tailor down what you need, how much you need, and where to place that money…
Percentage of Sales
Allocating a specified percentage of sales. The average for this style is usually anywhere between 9-12%. A smaller business will probably be anywhere around 2%.
The Advantage of this is that the marketing budget increases or decreases with the company sales revenue of the company. It will be harder for you to lose control over the budget and, possibly, deplete the sales revenue.
Setting up a flat dollar rate for their marketing budget. These work much better for smaller businesses rather than larger companies. This is an ideal method when doing one time expenses (trade shows, etc.) However, for a new business, this may not be the best as you have had no history of records to keep track of expenditures and sales. The business won’t be able to give a proper estimation of an accurate number to spend.
Creating a marketing budget is to analyze and estimate what the competition is spending and copy it.
Maintaining costs comparable with competitors and keeps the business in with others. However, that is only if they are budgeting right for themselves. It is definitely a gamble for your business if you aren’t careful.
Marketing Plan Objectives
This method uses the objectives in the marketing plan to determine the budget. It is created by estimating the expenditures it needs to achieve the desired marketing objectives. This plan is often tailored to the needs of the company. It can, however, be limited by available monies as the desired budget may exceed the money left aside.
What You Can Do to Break Out from the Rest
Planning the budget that is ideal for your business can help long-term savings and keep you from sinking the business before it has a real chance of taking off. But there is more than planning out a budget. There are others ways you can help trim the fat and save a bit more by finding apps and tricks to save your a little extra money on the side.
An average company spends about 55% of its revenue on goods and services. Many people don’t realize cost efficiency can be a strategic choice that creates a stronger revenue and builds up your business as a brand.
It isn’t always spending money on the newest tech or advertising. Sometimes it’s the simple steps you can take between your clients, inside your business, and even the use of free tools you may not have looked into before.
Deliver Great Service
This one should be a no-brainer. However, saying it and doing it are two different things. You can say your business gives excellent service but to show it and install that confidence in your company and onto your customer or client can be easier said than done. Make sure the communication between you and clients becomes stronger over time, not weaker. Your goal should be to not only get more consumers to check out your site but to also keep the ones you already have. Establishing a phenomenal relationship with your customer can become an advertisement in and of itself. Here are a few different options to build a relationship with a current or potential customer.
Keep Up with What is Current
Keep up with all the latest updates in the fire industry. Why not check out up and coming events and conventions that have the latest information, gear, and equipment all in the name of fire hazards. Find out what’s relevant and what is obsolete. Firex Industry is a global center of excellence for fire safety and holds conventions every year. This biannual event gives other industries a chance to talk with fire safety specialists, installers, consultants, and others responsible for fire safety in businesses, to get together and share information. Are there new updates? New inventions? It’s an opportunity to begin networking.
This is a great way to make connections, spread the word, and even help build up your business if you play your cards right. By networking, you’ll get to know others in this industry, which helps develop your prospects. Look at building a relationship with other businesses within your industry. Try the NFPA or AFSA; neither of which are direct competitors to your company and offer you more ways of connecting with your target audience. Check out your local area for any networking events happening that could help you profit. Get your organization or company recommended. There’s the possibility they’d be willing to place one of your advertisements on their page. With networking, it’s a give and takes; expect that in order to receive something, you must also have something to give back.
In many cases, the term “if it’s not broken then don’t fix it” works well. This is not the case for your business. Here’s what you consistently keep in mind: “Just because something works doesn’t mean it can’t be improved upon.” Sometimes changing up parts of your business can help your business and improve your relationship with your clients. What ways can you make your business more accessible to others? Maybe it’s offering a new direct way of keeping in contact with your customers. Maybe it’s a new idea to create new deals and opportunities for customers so that they remain loyal customers. Check out this article, which provides some of the different ways to help rebrand yourself.
Spend Less on Advertising
There’s an old saying, “to make money you have to spend money.” Chuck that right out the window. Do not think the way to create more business is to produce a multitude of ads and continuously show them over and over again; it’s counterproductive. This only causes the potential target audience to tune out of the conversation. With ads shoved in their faces, they are more likely to look somewhere else. Focus on a few ads at a time. Build them up and really make them stick in people’s minds. Remember that commercial for 877 cash now? It’s years later but you can still sing that song, I bet.
This is a big one, folks. There are other (very affordable aka FREE) ways to build awareness for your company. Lately, social media has taken an enormous part in providing a platform for businesses to advertise themselves to potential clients. Platforms like Facebook business or twitter, for instance, give instant and direct access to your customer. It has become second in activities that generate the best ROI (Return on Investments); email being number one.
Stay Ahead and Cost Effective By Taking a Step Back
It isn’t always a necessity to demolish your company’s budget to bring your business to new heights. Sometimes it’s merely cutting back on certain expenses and re-evaluating what a key component of the company is. Figure out what extra weight is holding you back. It could be as simple as changing advertising tactics when trying to catch the eye of your target audience.
Take a step back and establish the best ways to help your industry grow. Think about what your company specifically needs to flourish. It takes hard work, dedication, and the right people to set everything in motion. And we think you can do it.