Every year, businesses will rise and fall, including those in the fire protection industry. New businesses are created and take on established competitors. Some win and some lose–it’s the name of the game. And, according to research, only half of new businesses make it past the first five years; only ⅓ make it past the 10-year mark.
However, part of a company’s downfall might be the fact they try so hard to stand out and spread their name across channels. Sometimes, they end up losing more money than they make. They’re spending profits before they make them and the business sinks before it can swim.
Regarding the fire protection industry, it’s even more imperative to stand out from the rest. We all know standing out is a critical part of a company’s success. And finding balance between keeping ahead and being cost effective is a learned skill.
Budgeting, Promoting, Growing
First things first when establishing and growing your business: Set up a marketing budget. A planned budget keeps your team focused on specific goals and keeps you efficient in managing costs. It’s a resource your company can rely on. Statistically, up to 85% of small-to-mid-size companies operate on a fixed budget. Focus on how to spend your defined budget rather than on hitting particular goals or strategies across a multitude of marketing channels. A budget helps you look at the whole picture and how to best distribute the resources you have, rather than adopting a specific mindset or idea that could lead your business astray.
Typically, a marketing budget covers the cost for advertising, promotion, and public relations. Obviously, your budget will vary depending on the size of your business, it’s annual sales, and how much your competition is advertising. Depending on the industry, these budgets can range from a low of 1% to a high of 30%. However, a new company may spend up to 50% of its sales on introductory marketing programs for the first year.
Save Room in Your Budget
So, what goes in the budget? How do you want to make your company stand out from the rest? Has your company been around for a while, or is it newly established in the industry? These are important factors to consider when building your budget and marketing plan.
Consider Marketing & Advertising
The U.S Small Business Administration recommends spending 7-8% or your gross revenue on marketing and advertising if you generate less than five million dollars a year in sales.
Make sure you include:
- Print and broadcast advertisement
- Design and print costs for print materials (newsletters, direct mail, etc.)
- Website development
- Public relations
- Trade shows, such as conventions for latest tech development
- Any other special events, such as company parties or holiday events
Determine the Dollar Amount in Each Category
How much are you willing to spend? Every business’s budget is different, depending on your company’s needs and wants. But there are still common budgeting methods available to help you set up a template for your budget.
Budgets to Help Fire Protection Businesses Remain Cost Effective
Here are some of the common budgeting methods you can start with and tailor to what you need, how much you need, and where the money goes.
Percentage of Sales
This method is based on allocating a specific percentage of sales to various parts of your budget. The average percent allocated to marketing and advertising for this budgeting method is usually anywhere between 9-12%. Smaller businesses will probably average somewhere around 2% of sales allocated to marketing efforts.
The advantage of this method is that the marketing budget increases or decreases with the company sales revenue of the company, making it harder to lose control over the budget and deplete your sales revenue.
Dollar Approach
Alternatively, you can set up a flat dollar amount for your marketing budget; this often works best for smaller businesses. This is an ideal method when calculating one-time expenses (trade shows, etc.). However, his may not be the best for a brand new business. Because you have no history of past expenditures and sales, it can be difficult to accurately plan and budget for marketing activities. Your business might not be able to give a proper estimation of an accurate number to spend.
Matching Competitors
Another method is to create a marketing budget by analyzing what your competitors spend and mirroring it in your own spending. Maintaining costs comparable with competitors keeps your business on pace with others. The one caveat? It only works if your competitors are budgeting right for themselves. This method is definitely a gamble for your business if you aren’t careful.
Marketing Plan Objectives
This method uses the objectives in your marketing plan, which you would develop first in this case, to determine the budget. It is created by estimating the expenditures needed to achieve the desired marketing objectives. This plan is tailored to the needs and goals of your company. It can, however, be limited by available funds–more likely than not, your desired budget can exceed the money set aside for marketing activities.
What You Can Do to Break Out from the Rest
Planning a budget that is ideal for your business can bolster long-term saving efforts and keep you from sinking your business before it has a real chance of success. But there is more than just planning out a budget–and sticking to it. There are others ways you can trim the fat and save money to reinvest in your business by finding cost-effective solutions that streamline operations.
The average company spends about 55% of its revenue on goods and services to help run the business. Many people don’t realize cost efficiency is a strategic choice that creates a stronger revenue and builds your business and brand.
Now, this doesn’t necessarily mean spending money on the newest tech or the latest advertising trend. Sometimes, it’s simple steps you can take to improve relationships with your customers, increase retention and reduce employee frustration inside your business, and simplify your processes to get more done in less time. This can, of course, include finding free and paid tools you may not have looked into before.
Deliver Great Service
This one is a no-brainer. But saying it and doing it are two different things. You can say your business gives excellent service, but you’ve got to show it to instill confidence in your customers. Make sure communication between you and customers becomes stronger over time. Your goal should not only be to grow your customer base and get more customers to on your website requesting service, but to retain the customers you already have and drum up repeat business. Establishing a phenomenal relationship with your customer is 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 The Latest & Greatest in Fire Protection
Keep up with the latest updates in the fire protection industry. Check out upcoming events and conventions with the latest information, gear, and equipment that your company can use to enhance customer safety. Find out what’s relevant and what’s obsolete. Firex Industry is a global center of excellence for fire safety that holds conventions every year. This biannual event gives other industries a chance to talk with and learn from fire safety specialists, installers, consultants, and others responsible for fire safety. Are there new updates? New inventions or innovations? It’s an opportunity to begin networking–which, coincidentally, is our next suggestion.
Network
Networking is a great way to make connections, spread the word, and help grow your business. By networking, you’ll get to know others in this industry, which develop your prospects. Look at building a relationship with other businesses within your industry. Try organizations like the NFPA or AFSA—neither of which are competitors to your company and offer you vital educational content and more ways of connecting with your prospective customers.
Local networking events could also be beneficial. Meet other business owners who need fire protection services, find promotional opportunities within local professional organizations, and get your company recommended. With networking, it’s a give and take. Expect that, to receive something to the benefit of your business, you may also have something to give back.
Continuous Improvement
When it comes to your business, you need to maintain a mindset of continuous improvement. Just because something isn’t necessarily broken doesn’t mean it can’t be improved upon. Sometimes changing up parts of your business can help you and improve customer relationships. What ways can you make your business more accessible to others? Maybe it’s offering a new direct way of communication. Maybe it’s creating new deals and opportunities for repeat customers to encourage and drive retention. Check out this article, which provides some of the different ways to help rebrand your business and continue on a path of growth.
Spend Less on Advertising
Chuck the old saying, “to make money you have to spend money,” right out the window. Do not think that the only way to create more and new business is to produce a multitude of ads and show them indiscriminately over and over again. It’s counterproductive. This only causes your prospective customers to tune out of the conversation. With ads shoved in their faces, they may be inclined to look somewhere else. Focus on a few specific and highly targeted ads at a time. Build them up with strong messaging and quality content to really make them stick in people’s minds.
Building Awareness for Free
This is a big one, folks. There are other, very affordable (aka FREE) ways to build awareness for your company. Lately, social media has played an enormous part in providing platforms for businesses to advertise themselves to potential clients. Platforms like Facebook, Twitter, and Instagram give you instant and direct access to prospective customers. It has risen to second in marketing activities that generate the highest ROI (Return on Investment). Email still holds the top spot at number one, but social media is an increasingly valuable–and often cheaper–marketing channel.
Stay Cost Effective By Taking a Step Back
You don’t have to demolish your company’s budget and spend, spend, spend to bring your business to new heights. Sometimes, all it takes is cutting back on certain expenses and re-evaluating key components of your company. Figure out what is holding you back and taking more resources than its worth. It could be as simple as changing advertising tactics when trying to catch the eye of prospective customers.
Take a step back and establish the best ways to help your business 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.
