A new survey by ProjectWord found that:
- Nearly 40% of new companies do not have a marketing plan.
- Around 50% of new businesses launch without any form of marketing or advertising budget.
- 1 in 3 new businesses don’t understand what marketing is or what role it plays for new companies.
Sadly I don’t find the results all that surprising, but they are appalling. Anyone starting a business without a marketing plan is unlikely to have any sort of business plan at all. They’re just winging it and somehow hoping it will work out. It won’t. Chances are if you’ve not even got a marketing plan you won’t know a) what you’re going to sell or b) who you’re going to sell it to – knowing both is vital to the success of a business.
If you consider that 50% of new businesses launch without any form of marketing or advertising budget and 50% of new businesses fail in their fist year there seems to be a startling correlation in the numbers. It’s not conclusive proof that no marketing budget will result in a failed business, but it should be enough to make you think very carefully about starting a business without a budget set aside for marketing.
To help the 1 in 3 that don’t understand what marketing is I’ve previously defined marketing:
Marketing is the process of identifying the customers wants and needs, refining the businesses offering to meet them and then communicating to the customer how the businesses product or service satisfies those wants and needs.
In one of the top books on marketing (Marketing Management) Philip Kotler defines marketing:
Marketing deals with identifying and meeting human and social needs. One of the shortest definitions of marketing is “meeting needs profitably.”
Which brings us back to the marketing plan? How can you identify needs and meet them profitably if you don’t have a marketing plan?
So I ask you:
- Do you have a marketing plan?
- Did you start with a marketing budget?
- Do you know what marketing is?
Although I have to admit I started my first business without knowing what marketing was. Consequently I didn’t have a marketing plan or marketing budget either. While we survived and managed to succeed, trust me it was an expensive mistake and we didn’t start to do well until we rectified it.
Nowadays I don’t even consider a business opportunity or idea until I’ve sketched out a marketing plan, done some market research and estimated the budget that would be required to satisfy the marketing plan.
This blog is about business opportunities and ideas that I spot, think of or hear about and think are useful and interesting. It is intended to provide ideas and inspriation for you to help you find the right business idea for you to then grow it into a successful business.
Hi John that is scary but I can’t say I’m surprised. I’ve lost count of the number of business owners I’ve spoken to and asked what marketing they do. They nearly all reply – oh – I’ve just put an ad in the yellow pages.
And as you say – a lot of them don’t even know what marketing is and some of them think sales and marketing are the same things. Oh well – at least there’s plenty of folk out there for us to help and advise.
Cath,
True, far too many small businesses don’t understand the difference between marketing, advertising and sales. Unfortunately a lot of “small business advisers” aren’t much better.
As you say though it leaves lots of people for us to help.
No budget or marketing plan, that’s me down to a tee:)
Seriously though you should have some sort of plan even if it’s just a few notes to remind you what you’re meant to be doing.
Absolutely – your plan doesn’t need to be some hefty formal document, in fact it’s not really the plan itself that’s important, it’s the process of creating the plan and thinking through the issues that matters.
The first business we started did not have a marketing plan, this was because we were given all the customers from a previous job. As the company grew we spent more time and money on marketing, which then paid off.
I would not start any other business without a marketing plan in place.