Why setting aside budget for marketing strategy is important
AT any stage of a small to medium enterprise or SME’s life at the planning stage, to pre-launch, start and after, it is always prudent to set aside budget for marketing. The role that marketing contributes to the success of an SME’s business may still be a debatable topic. Some would argue that they were able to break into their specific industries and have sustained their growth with very minimal marketing spend. Some would even argue that it is, in fact, an unnecessary expense. However, what most are unaware of is the exponential growth potential they are foregoing without a marketing strategy.
Marketing provides you with the tools to identify how to continue satisfying the needs of your target market, which provides your business more profit. It surely is the only way to sustain your business as more and more competition join over time. Even more daunting for startups is the fast-growing number of new businesses who offer the same product or service, adding to the monotony. In an almost sink of swim situation, how would startup businesses set themselves apart from competition?
What are the benefits of a good marketing strategy?
Introduces your business to your target market.
– In this digital age, a business going for scale would need a website that primarily serves as its signature for prospective clients and customers vetting its legitimacy. Apart from the basic company and product information, SMEs should consider ranking high on Google and other search engine sites to get an edge over its competitors in the industry. Search Engine Optimization or SEO writing would have to be regularly uploaded on the site to increase its rank among competitors online.
Increase awareness and target market following.
– As online penetration continues to increase in the Philippines and in the region, especially social media, it’s the best way for your business to be heard and maintain a regular relationship with your target market (both current and potential), by giving them relevant content.
Unlocks the potential of your business by increasing sales.
– Provided a well-thought-of and effective marketing strategy that integrates your brand, strategies on all platforms, these efforts will surely be converted into sales.
What to do when your cash flow is only enough to keep your operations running?
SMEs usually forego planning their marketing strategies, because they fear that allocating the little budget they have to marketing is a risk. The common misconception is that marketing has little impact on improving their income compared to keeping the cash supply for day-to-day operations.
For SMEs who have been undergoing business operations for a significant amount of time, you might have had repeated experiences with clients who have relatively longer paying schemes than others. Larger corporations usually have longer paying schemes and because they are highly reputable, small businesses tend to think it’s a small price to pay for increasing the value of their client portfolio. Stable companies with a long history, give small business owners the confidence of getting paid.
SMEs, however, can’t disregard the growth barriers their pay schemes impose on businesses operations. Instead of having the flexibility to accept another project or partner with a new client, you would be unable to do so. The opportunity to increase your income, or have cash ready for capital expenditures that can increase your business’ capacity to innovate and capture the increasing demands of the industry are put on hold until the next payment.
For some, getting a business loan is the last option in their minds. They would try to optimize their operations by doing the following: 1) Invoice customers ASAP; 2) Liquidate old inventory; and 3) Scrimp on 90 percent of income for anticipated volume demand. Nonetheless, no matter how efficient processes are, the usual case is that they would still be unable to set aside cash for marketing.
Treading the inevitable: SME Business Loans
The statistics of SMEs failing due to bad cash management cannot be ignored, as it currently stands at 82 percent according to a US bank study. Therefore, it would actually be wise for SMEs to include applying for business loans in their plans. SMEs should also note that it is rare for SMEs to evolve into bigger and improved businesses without undergoing financing support. Even the largest corporations all around the world regularly get funding from banks and the investing community.
There are plenty of options for SMEs to get business loans. Bank loans are usually the most trusted, but are also the most tedious to avail given the longer processing time, longer list of requirements to submit and more stringent qualifications.
SMEs have nothing to fret however, as fintech solutions continue to rise in the Philippines and across the region. First Circle is among the top fintech firms that supports both established and new businesses locally.
SME business loans through fintech allows you to worry about scaling your business instead of getting stuck on the day-to-day operations.
Instead of worrying about how to keep your business afloat, allow us to assist you in covering the cash you need to keep on operating for the next few months, while you busy yourself with budgeting for an effective marketing strategy.
Trusted by the Philippine government, First Circle is a finance partner of the Department of Trade and Industry and is one of the fintech companies licensed by the Securities and Exchange Commission in the Philippines.
To learn more about First Circle’s financial solutions, visit our website at www.firstcircle.ph
Lee-Anne Tobias is the communications associate for First Circle Growth Finance Corp. She has ten years of experience in Digital Media, Business Communications, Corporate Social Responsibility and Qualitative Research in the energy and market research industries. To get in touch with her you may email her at [email protected]. To know more about First Circle and its financing services please visit their website at www.firstcircle.ph