Today more than ever, small businesses are struggling with questions of appropriate allocation of resources. When money is tight, the decisions as to how to allocate it often fall on the accounting department or the owner, who may well not be financial planners or investors. The common strategy during hard times is to use funds to brace against financial disaster. While this might make perfect sense, it can also be a way to almost guarantee that your business continue to run at a loss. During hard times, small businesses may need to shift the focus of their costs and expenses, but in a different way than might be apparent. Making investments good, solid investments—instead of pulling out of the market further due to perceived lack of resources—can be the golden ticket that allows a small company to survive financial hardship.

One such investment that often suffers during economic hard times is investment in marketing and infrastructure. In marketing, this may include scaling down or elimination of web marketing, targeted print advertising, tradeshow activity, and telemarketing. In infrastructure, this may include elimination, scaling down, or non-implementation of key business growth factors, like scooping up talented sales staff that are laid off elsewhere and investing in inventory and cash-flow management systems that help you stay profitable and allocate funds where they will draw the best return on investment.

The investment in marketing and the investment in infrastructure actually go hand-in-hand in many cases. For example, an expense management system will allow a business to identify waste and areas for improvement, thereby allowing the company to allocate funds in a more meaningful, results-driven way. Hopefully, this will help you spend less on phone bills and more on investments that will yield returns, such as marketing campaigns.

As difficult as it can be for small businesses to survive an economic downturn, forward-thinking actions are truly the only way to stay afloat. The more you withdraw from marketing activity, the more you risk a serious cash-flow problem. It is precisely when your regular, returning customers aren’t coming in as often—or at all—that you must find ways to invest in bringing in new customers and increasing the efficiency of your organization. What investments are most important? Here’s a short list:

• If you do not have one, implement a professional-quality inventory management system. This will help you keep inventory small but in line with customer demand.
• If you do not have one, implement an expense management system. Track all your expenses in a way that can be evaluated using multiple criteria, and identify waste within your organization
• If you are not already doing so, attend at least one tradeshow a quarter. Choose tradeshows in which the participation cost if not exorbitant.
• Invest in search engine marketing and web marketing. Online marketing is the best way to get the most out of your marketing dollar, or the best bang for your buck.

Most importantly, remember that there is no time like the present to make your name known, to win new clients, and to chase new opportunities.

Read More…

• Back to Basics Marketing
• Marketing as Company Wide Responsibility
• Mobilization: Reaching Outside the Marketing Department
• Advanced Lead Qualification: Sales and Marketing Work Together
• Sales’ Feedback into Marketing: Profiling Prospects and Their Problems
• “Inside Marketing”: Marketing to Your Own Sales Organization
• Developing Unique, Customer-Focused Value Propositions
• How to Train an Entry-Level Marketing Employee
• When Return on Investment Doesn’t Paint a Full Picture
• Defining and Presenting Value Propositions in a Competitive Market
• Logos and Promotional Product Designs for “Difficult” Subjects
• Defining and Refining Value Propositions for Luxury Items
• Evaluating Return-On-Investment (ROI) for Tradeshow Activities
• You Are Here Management Mistake in Small Business: No Investment during Trying Times