Is that a statement or a question? After spending many years working on the marketing side of business, I have always believed that great businesses have great marketing plans. In late September of this year, I got a job with a Marketing/Business Development firm, and I learned that marketing is only effective when the business of the business is effective. Now in case you did not understand that, don’t worry. I didn’t understand it either at first. Please keep in mind that I spent years working in various areas of marketing. Even when I owned a business, my business plan revolved around my marketing plan. As it turns out, that S.W.O.T plan is great for research, but it won’t put any money in the bank.
Marketing does not put money in the bank! Yes, you read that correctly, marketing does not put money in the bank. Please, don’t start writing those nasty e-mails or comments. Instead, let me explain. Marketing increases sales, revenue, production, supply and market share . Marketing also produces competition. This is where marketing begins to cripple the bottom line. To stay relevant with competition, most companies begin getting competitive with the pricing of the product or service. As consumers, we are conditioned to shop for the best price (unless of course it’s an Apple product one is looking for.) So it’s only natural for successful companies to begin reducing prices. The larger the company grows, the less control an owner will have. This is where costs of materials, shipping and marketing begin to unknowingly increase; even when the costs seem like they are going down; this is because they compare old cost per item, versus new cost per item, but they don’t compare it to the profitability per item. So, while the marketing efforts keep growing the sales and growing the company, it does not necessarily do anything to bring more money into the bank.
The business of the business: The concept is not new to me, but the overall theory is. For example, as a manager, I like knowing how much each one of my employees is worth and how profitable they are. However, I never considered the profitability of the tools they use. I never considered how profitable each square inch of my shop is, or how profitable every dollar spent in the cost of doing business is worth. In addition, I never considered that I could shop for a better tax rate. Each one of these things is actually the business of the business. So while the gross profit of a business is the cost of an item versus how much it is sold for, the bottom line includes the cost of doing business and taxes. While an Integrated Marketing Communications (IMC) approach would consider some of these items, taxes is not one of them.
Do not turn away from marketing: Just to be clear, I am not recommending that any company do away with their marketing plan. What I am saying, is that marketing can help your company grow, marketing can bring your company success, but it can also bring competition. IMC focuses on quality of products and customer satisfaction. IMC is great for growing. But what happens when the company is too big for one owner to handle? Growing more won’t solve that problem. So I say, embrace your marketing plan, embrace your CPA, but furthermore look into a business development firm that will embrace the business owner’s dream. By looking at the business of the business along with a marketing plan and CPA, success becomes more attainable, but more than that, happiness and satisfaction becomes a reality for a stressed business owner.
If you would like more information about the business of the business, please contact through Twitter or my cell: 951-339-0809