Marketing & Business QnA [18 Oct]

I wanted to share some key takeaways from our live conversation this week.

Let's dive in.

Understanding Your Advertising Strategy

One of the questions that came up was about ad spend:

"Is it better to run a small amount over a long period or a bigger amount over a shorter period?"

The answer isn't one-size-fits-all; it depends on your business objectives and budget.

For example:

Webinars: If you're promoting an upcoming event, spending more in a shorter period can generate immediate interest and higher attendance.

Evergreen Products: For products or services that are always available, a consistent ad spend over a longer period helps maintain steady traffic.

It's crucial to determine what you can afford monthly without jeopardizing your business's financial health.

Starting with a sustainable budget—say, R10,000 per month—and adjusting based on performance is often a good approach.

Knowing Your Numbers: The Key to Success

We can't stress enough the importance of understanding your business metrics.

One entrepreneur shared that she needs 20 new clients each month and spends about R10,000 on ads to achieve this.

Because she knows her conversion rates, she can calculate how many leads she needs and adjust her ad spend accordingly.

Being aware of your numbers allows you to make informed decisions and set realistic goals.

Remember, entrepreneurship isn't just about having a great idea; it's also about managing the business side effectively.

E-commerce and the Importance of Margins

For those venturing into e-commerce, understanding your margins is critical.

Here are some key considerations:

Product Demand: Ensure you're offering something people want or need.

High Margins: Aim for at least a 150-200% markup to cover costs and generate profit.

Cost Factors: Don't forget to include advertising costs, payment gateway fees, shipping, software subscriptions, staff salaries, and VAT.

Without sufficient margins, your business may struggle to scale or even sustain itself.

Being meticulous with your numbers ensures you're building a financially healthy enterprise.

Entering New Markets: Challenges and Opportunities

We discussed the complexities of introducing a new product to the market.

For instance, selling a unique water filtration system requires educating consumers about why they need it.

This often involves significant time and financial investment in marketing and education.

There are two main strategies:

Competing in Saturated Markets: Offer a unique selling proposition that sets you apart.

Entering New Markets: Solve a problem that consumers are either unaware of or have accepted as unsolvable.

Both strategies have their challenges, but understanding your target audience and crafting the right message is essential.

Entrepreneur vs. Business Owner

A crucial point we touched on is the distinction between being an entrepreneur and a business owner.

Entrepreneurs: Focus on innovation, vision, and creating new ideas.

Business Owners: Concentrate on the operational aspects, including finances, logistics, and scalability.

While you may start as both, recognizing these roles can help you balance creativity with practicality.

Understanding the business side ensures your innovative ideas translate into sustainable success.

Preparing for Black Friday: Making the Most of It

With Black Friday approaching, it's time to strategize on how to maximize this opportunity.

Offer Real Deals: Consumers expect significant discounts during Black Friday. A minimal 10% off won't cut it.

Customer Acquisition: Use this period to acquire new customers at a lower cost, even if it means slimmer margins initially.

Long-term Value: Focus on customer retention and lifetime value rather than immediate profits.

Black Friday isn't just about boosting revenue for the day; it's about setting the stage for ongoing customer relationships.

Final Thoughts: The Importance of Numbers

Throughout our discussion, one theme remained constant: the importance of knowing your numbers.

Whether it's understanding your ad spend ROI, calculating your margins, or preparing for large-scale sales events, data drives decisions.

Numbers are a reflection of your business's health.

Ignoring them is like neglecting a crying baby; it won't end well.

So, take the time to dive deep into your metrics. Your future self will thank you.