Optimizing the local, independent business

In my community in Cleveland’s inner-ring eastern suburbs, Walmart just abandoned its old location and moved less than a mile away to a newer, gianter, superer Walmart. It has increased the size of its food section – making no secret of an ambition to take yet more business from the two independent grocers that still thrive here.

The character of my community is defined in large part by the independent merchants who operate here. Many of these small-business owners have made an art out of surviving the onslaught from big boxes and national chains. But that job requires constant vigilance and change.

The non-profit FutureHeights exists here in part to support a business environment that’s friendly to local businesses. On its website, it lists 10 reasons why people should shop local first.

That list can also be turned around and used by local, independent merchants as a game plan for competing against the bigger and blander chains.

Here it is, with my own annotations on how local businesses can optimize themselves:

1. Keep the money in the neighborhood: For every $100 spent at a locally owned business, $68 goes back into the community, strengthening the tax base. For every $100 spent at a chain store, only $43 comes back. [Source: Institute for Local Self-Reliance]
For businesses: Broadcast your involvement; allow local events to be posted in your windows; discuss local issues (in a positive, upbeat way) on your company’s Facebook page and other communications. You and your business will come to be seen as part of very fabric of the community.

2. Embrace what makes the community different: One-of-a-kind independent businesses are part of what gives Cleveland Heights and University Heights their attractive character. But competition from well funded national chains can be very aggressive, and our local merchants can’t survive without our business. If we wanted to live and shop in a cookie-cutter suburb, we wouldn’t be here.

For businesses: Be aggressively unique and promote that individuality in everything you do. Some people just want low prices and 100,000 square feet of selection and there is nothing you can do to keep such customers. So focus on thrilling the customers who value the different and willingly pay a little bit extra to get it.

3. Get better service: Local businesses often hire people who have a better understanding of the products and services they’re selling, and who take more time to get to know customers and their neighborhoods.

For businesses: Train your staff well, and maximize your time with customers to serve them as only the owner can.

4. Buy what you want, not what the national headquarters wants to sell you: Locally focused small businesses can be much more responsive to local needs than a national chain. Together, a network of local independent businesses guarantees a more diverse selection that is better aligned with the home community.

For businesses: The local grocers mentioned at the beginning of this post are great at this; they carry specialty items that customers have been buying for years, and which Walmart won’t stock. If as customer is looking for something they don’t have, they’ll offer to order it and find some small space on the shelves to keep it in stock.

On another note, you know how your products differ from those of national chains, and you know the games that big boxes play. If their Chinese-made goods are flimsier than yours, or if their special packaging actually offers a higher per-unit cost, help to educate your customers; they want to understand why your goods really aren’t more expensive than the big chains.

5. Create more good jobs: Taken together, small local businesses employ more residents than national chains. Local business owners are more loyal to their employees, and vice versa.

For businesses: Make a special effort to employ locals. Their friends will do business with you; the quality of life of their entire network is based on your profitability. That’s a lot of people pushing for your success.

6. Help the environment: Independent local businesses locate in our traditional commercial districts, a short drive away or even within walking distance of our homes. National chains build on the suburban fringe, leading to more sprawl, traffic congestion, habitat loss, and pollution.

For businesses: Embrace sustainable practices and local sourcing when possible. Can you think of ways to reward such practices among your customers?

7. Support community groups: Non-profits receive an average of 350% more support from local business owners than they do from non-locally owned businesses.

For businesses: Embrace the stream of people who come to your business seeking contributions. Can you allocate $500 a year to local causes and dole it out in $25 increments? Doing so would support 20 community causes – walkathons, school plays, soccer teams and the like. It’s OK to set guidelines, such as: The cause must be truly local; it must be apolitical; it must provide some kind of signage, advertisement or other visible recognition for your business; etc. For every cause you support, you create loyalty and preference among dozens of families involved. You want to be known as the easiest “yes” in town. That doesn’t make you a sucker; it makes you a caring neighbor.

8. Invest in the community: Local businesses are owned by people who live here, work here, and are more invested in the future of this community.

For  businesses: See above.

9. Put your taxes to better use: Local businesses in traditional shopping districts need comparatively less infrastructure investment and make more efficient use of public services as compared to nationally owned chain store, which consume a disproportionate share of space, utility and transportation infrastructure, and public resources.

For businesses: Get together with other businesses in your district and look for ways to save money for yourself and the community. Is it possible to share dumpster service or sidewalk clearance? Can you work together to communicate with City Hall on issues of safety and regulation? FutureHeights printed small point-of-sale postcards that contain this list of reasons to shop local, and makes them available to merchants who want to distribute them. You and a few merchants could get together and split the nominal cost of doing the same.

10. Be a model for Ohio and the nation: In an increasingly homogenized and wasteful society, neighborhoods built around small-scale commercial districts and unique local businesses pose a more attractive and sustainable alternative to characterless sprawl–not only making for better quality of life, but freeing up resources for improved future growth.

For businesses: Decorate your windows; put festival lighting outside the store; do your part to make your business district warm and attractive. Since the first shopping malls were built in the 1950s, real estate developers have been trying to recreate the look and feel of Main Street. If you occupy the real thing, emphasize it. And let customers know that every dollar they spend is a vote for the kind of shopping they want to do. Thank them when they vote for the kind of shopping you offer.

 

 

 

The oppression of the wrong quadrants

This is so simple, so obvious, it probably doesn’t need to be stated. Except that I first heard it a couple decades ago and have used it every day since. So maybe a brief mention:

The Productivity Matrix is a simple tool that helps you make sure you’re doing the right work at the right time.

Stephen Covey had a matrix like this in his iconic book The 7 Habits of Highly Effective People. That may be where I first saw it, though his is organized a little differently than the one here. But the point is the same: Everything you do fits somewhere within this matrix.

Items in Quadrant 1 are tasks that are not urgent and not important. It’s amazing how many of these come in each day by e-mail – and how easy it is become indentured to them. Working in Q1 is “Productive Procrastination.” You can tell yourself you’re getting something accomplished, but it’s never anything that matters.

Items in Quadrant 2 are urgent and not important. These are often other people’s emergencies – their failures to do the right thing at the right time. Regardless of origin, Q2 work is toxic – stressful yet pointless.

Items in Quadrant 3 are both urgent and important. Some Q3 work is an integral part of daily business – seating lunchtime customers at a restaurant, or doing the end-of-the-month billing. You can’t get ahead on this stuff.

But some Q3 activity exists because it simply didn’t get done sooner – like planning holiday sales promotions in mid-October. The work would have been more fruitful if it had been done in August. This kind of Q3 work can be tough on profits; it often results in extra expenses like expedited shipping and paid overtime. When big businesses undertake “process optimization” what they are really doing is figuring out how to reduce the number of tasks that end up in Q3.

Items in Quadrant 4 are the source of all things good in business and life. These not urgent  but important activities are things that matter – things to be pondered, polished and perfected. It is in Quadrant 4 that businesses are transformed, partnerships are sealed, successes are made, happiness is achieved.

It’s easy to get so wrapped up in stuff from the other quadrants that you can go days or weeks without ever touching Q4 work. But if you can schedule time every day – even a little –  to work in Quadrant 4 activities, you’ll find yourself spending more time on the things that matter and bring you joy. And as time passes, you’ll find that more of what you do works out well.

 

 

3 local marketing best practices: Be seen, be known, be remembered

Success in marketing isn’t about finding the one thing that works; it’s about cultivating a range of activities that, cumulatively, bring in the customers you need. Some of the best activities cost little and exploit your own interests.

Here are examples from 3 Cleveland Heights businesses that do a good job at making themselves seen, known and remembered:

Community involvement: Every year on New Year’s Day, Tommy’s Restaurant hosts a fundraiser for HeightsArts. Owner Tommy Fello donates the food and the entire facility, and a handful of his key staffers donate their time to cook. But that’s just the most visible of many local causes the restaurant supports – usually by providing the food. The result: Samples of his food showing up all over town, an immense amount of goodwill and 40 years in business.

You can’t give away goods and services to everyone who asks, but if you pick good causes and make sure to get reasonable recognition for your support, you’ll work your way into the hearts of the people in the community – the very people your business exists to serve.

Leverage small partnerships: Not quite 2 years old, The Winespot has quickly evolved into more than a store. Through a partnership with the Cleveland Institute of Art, its walls showcase (and sell) student art. It hosts a couple “openings” a year to introduce the next round of artists. It also has a small seating area and a location appropriate for small music combos to perform.

Launching from that, owners Adam and Susan Fleisher have focused on extending the store’s productive hours by establishing it as a venue for special events – and offering corkage to allow customers to enjoy wine and beer purchases on premises.

Now they’ve added dinner to the mix; the store keeps menus on-hand from 5 nearby restaurants. You can buy a bottle of wine or beer, pay a corkage fee and call in a food order. The restaurants will bring the meal to you – no surcharge.

It’s not likely to be the most important source of business for anyone involved. But it’s clever, cheap and just different enough to bring in some incremental business for everyone.

Exploit undermarketed venues: Before opening Sweetie Fry’s storefront location, owner Keith Logan sold his craft-made ice cream from a portable food cart. Last fall – looking to keep the food cart busy – he tried to swing a deal to sell ice cream at Heights High football games.

While that proved unworkable, he and the school created a sponsorship program that brought in money for the athletic department and promoted Sweetie Fry during games. Several times throughout each home game, the PA announcer would ask a local trivia question. The prize? A certificate for free Sweetie Fry ice cream.

The contests were a hit. Sweetie Fry’s name became unforgettable among those in attendance. And a small business quickly earned and outsized reputation.

Each of these companies could serve as the source for more such examples, because all of them layer their marketing through multiple activities.

There’s bound to be something your business can do too that doesn’t cost much money, plays off your strengths and interests, delivers positive results and can be replicated for success. The trick is to find it.

 

Social media marketing: Where to start

Most business owners rightly feel they have better things to do than play around with social media.

At the same time, it’s not an exaggeration to say social media has revolutionized marketing. It allows any business to engage in “content marketing” – essentially developing its own audience at little or no cost, and engaging with them to drive interest in sales. To ignore this is to ignore the behavior of your customers and prospects.

But with so many social media outlets, it’s often hard to know where to get started or what to do next.

Every social media site has its own peculiarities and best practices. Learning the nuances of each, takes a certain amount of time and commitment. So I recommend getting involved in one platform at a time. Start with Facebook, for instance, and work it until you’re comfortable about how it adds value. Only then should you look to add another platform.

At the same time, understand that social media outlets are like ingredients in a sandwich. A piece of ham tastes good, but it’s not lunch until you put it between slices of bread and add tomato, cheese and mustard. With social media, you may need to layer 3 or 4 different sites before you have a program that actually drives revenue to your business.

As an example, most of my social media clients combined Facebook and Twitter – and in some cases a third relevant site – before they gained traction at building audience.

Here is a basic overview of the major social media outlets and what each one brings to your marketing. All are trying to find services you’ll pay for, but they can still be used effectively for free.

Facebook

What it’s for: The foundation of any social media marketing – particularly if your products/services are targeted to a consumer audience. Use it to aggregate an audience of people who are interested in what you sell or do.

Strengths: A billion users. Easy and low-cost advertising. Integrates with many other prominent social media outlets (i.e., when you post on Twitter, for example, it’s easy to have the Tweet automatically post to Facebook as well). Finally, the best adoption in mobile computing – allowing you to easily capitalize on the astoundingly fast migration to mobile devices.

Weaknesses: Constantly changing. Noisy, commercial and often unpleasant to use. Takes commitment to feed it with content.

Nuance: Don’t use your personal page for business. Set up a business page; you’ll look more professional and once you have 30 “likes” it provides you with valuable data to improve your marketing – still for free.

LinkedIn

What it’s for: Social media networking specifically for business. If your products/services are targeted to a business audience, start here instead of Facebook.

Strengths: Many ways to find and engage relevant audience.

Weaknesses: Doesn’t integrate well with other social media. It’s also become so rich with features that it is becoming difficult to use. Further, some of the best features are now reserved for paid users.

Nuance: Despite the negatives, it’s still the largest and most robust business-to-business networking tool available. You’ll want both a personal page and a business page.

Twitter

What it’s for: Broadcasting headlines. Use it to let people know you have new content to share – whether it’s on Facebook, LinkedIn, your own website or anywhere else.

Strengths: The accepted standard for deploying brief messages. Also strong on mobile platforms.

Weaknesses: Low signal-to-noise ratio. You need a lot of followers here to count on your messages being seen.

Nuance: Because Tweets are so brief, you’ll want to shorten any website links that you broadcast with a free utility like tinyurl.com, bitly.com or goo.gl. Also, the fastest way to gain an audience is to automatically follow anyone who follows you. There are a number of tools that help with this, such as TwitterAutoFollowback  (rolls right off the tongue, doesn’t it?) or Twollow.

YouTube

What it’s for: Everything video. If you’re going to use video, then you want to use YouTube. Even if a video is posted on your website, you should put a copy of it on YouTube as well for the visibility in search.

Strengths: The accepted standard for all things video.

Weaknesses: It’s not much good for anything else.

Nuance: If you’re going to post multiple videos, create a channel for your business and promote it on your website, other social media sites and in your marketing materials.

Slideshare

What it’s for: Posting presentations of all kinds. It’s owned by LinkedIn and integrates well with it.

Strengths: Easy to use and well-known in business-to-business environmenbts.

Weaknesses: Doesn’t integrate well with sites other than LinkedIn.

Nuance: Load it up with whatever presentations you have – technical materials, sales presentations, workshops and anything else you do. It’s surprising how much time people spend browsing through presentations once they’ve found the one they’re looking for.  Also, upload presentations as PDFs to assure broadest accessibility to your information.

Google+

What it’s for: Even social media experts will tell you that they don’t really know what Google+ is best at. It’s intended as Google’s answer to Facebook. It is often appreciated for being less commercial and crowded than Facebook, but if you’re beginning a social media program, that can be a disadvantage. Facebook may be noisy, but it has tools designed to make marketing easy. Success on Google+ demands more sophistication in social media marketing.

Strengths: Google’s most powerful attribute is search, and the promise is that anything you post using Google+ will be easier to find on the world’s best-used search engine.

Weaknesses: No sense of place. Facebook is a destination. Google+ is a concept.

Pinterest

What it’s for: Creating online bulletin boards filled with images. If your product or service is visually oriented, use Pinterest to create relevant collections of photos and show them to your audience.

Strengths: Easy to use and integrates well with other sites. So you can feed content to Pinterest and have it automatically post to Facebook and Twitter.

Weaknesses: Typically viewed as a site for women, though that reputation is fading.

Nuance: Pinterest is a social platform in itself, and it wants you to gather followers. But you can use it to organize and display photos while focusing your “audience development” efforts on Facebook and Twitter.

Instagram

What it’s for: Very much like Pinterest. But it originated as a photo-enhancement app for smart phones and it maintains that heritage today. While Pinterest is about organizing collections of images, Instagram is more about taking, dressing up and sharing photos (and now, short videos).

Strengths: Integrates with other social media.

Weaknesses: How many different ways do you really need to take a picture or video?

Foursquare

What it’s for: Geographic social media; people check in to places they visit. By encouraging people to check in, you create visibility on the Foursquare network.

Strengths: Creates attention to storefront businesses that rely on heavy traffic.

Weaknesses: Not much buzz about it these days.

There are plenty more social media platforms, but if you’re not already deep into social media, don’t go beyond what’s contained here. Pick an appropriate place to start and then get comfortable using it.

Social media doesn’t have to take over your life, but if you want people to know about your business, it should be at least a regular part of it.

 

Exploiting the ‘Best of the Heights Awards’

Nominations have begun for the 2013 Best of the Heights Awards. If  your business is located in Cleveland Heights or University Heights, this local recognition program provides an opportunity for free and low-cost marketing. Here’s how this year’s program works, and how to take advantage of it in your business:

How it works

The program is a little bit different this year. It’s being run in 2 rounds. First is an open nomination period running through June 15. Anybody can nominate any local business in any of 22 categories.

Companies receiving the most nominations in each category will  be named as finalists. Voting on finalists takes place in the second round (July 1-Aug. 31).

How to exploit it for your own good

1. Nominate yourself. There’s nothing wrong with self-promotion, and nobody will ever know you were the first person to nominate the business. Ballots require your name and contact information, but that isn’t shared publicly; it’s just to make sure the nominations are valid. Here’s a link to the online form.

2. Ask staff, family and friends to nominate you too, and tell then what category they should use.

3. Ask customers – also prompting the correct category. The very act of asking customers to nominate you puts them on your team and brings them closer to you. Here are ways to make it easy for them to nominate you:

  • Keep a supply of forms on your counter (you can photocopy them right out of the Heights Observer; we don’t mind). Present them nicely, in a basket with a sign and leave another clearly-marked basket for completed forms. You can mail them to the Observer all at once.
  • Use your website and e-mail communications to ask people to nominate your business. Provide a link directly to the online form in those communications to make it as easy as possible. This is a welcome opportunity to communicate with customers without asking them for money. You’ll be surprised at how many are happy to engage with you at this level.
  • Put a message on your company’s Facebook page and any other social media sites you use. Make it direct, something like: “Joe’s Eats” is excited to participate in this year’s Best of the Heights Awards. Help us get to the next round by nominating us in the “Best Bar, Pub or Tavern” category. Here’s a link to the nomination form: http://ht.ly/kChN7.”

4. Get your staff involved. Make sure everyone on your team knows this is a special initiative. Give each his or her own supply of forms (they can place their initials in a small spot in the corner) and offer a reasonable incentive – a cash bonus or gift certificate – to the staff member who brings in the most valid nominations.

5. Team up with friends in your business district. While you’re soliciting nominations, offer to suggest businesses in other categories if they’ll do the same for you.

6. If you are named a finalist, repeat the whole process in the second round.

7. If you’re a finalist or a winner, promote yourself. Put the honor into your advertising, on your letterhead template, in your e-mail communications, etc. Where appropriate, provide a link to the Heights Observer’s coverage of the winners (probably in October).

When all is said and done, the nominating process is a useful and refreshing way to promote your business. It engages your customers at a different level; it helps them think of your business not just for what it sells, but for how well it runs.

Even if your business is tiny or new and you think you have little chance of being named a finalist, the process is likely to strengthen some existing relationships and create new ones.

It might also reveal areas where you need to build up your marketing, such as building your Facebook network, or tidying up your customer database, or creating regular e-mail communications.

In the worst case, if you find people aren’t excited to nominate the business, you’ll have learned something important – and can begin looking for ways to improve the customer experience.

The Best of the Heights is designed to highlight and honor the many excellent independent businesses that are located here. But it’s also a platform for you to do  some honest self-promotion. I hope you’ll make time to do so.

 

 

A single metric to compare different publications

You’ve received quotes for advertising from two publications or websites; one wants to charge $150 and the other $350. How do you know which is the better deal?

Creating an apples-for-apples comparison between different publications is difficult because it involves so many variables.

The most common calculation for this job is cost-per-thousand (CPM), which measures the amount of money it takes to reach 1,000 people. You can use it for any medium – broadcast, print and online. (But it won’t hold up if you try to compare one medium against another).

Here’s the formula:

CPM = Rate/(Circulation x .001).

So if an ad costs $250 and the publication’s distribution is 8,000 copies, the CPM is $250/8, or $31.25.

It’s a simple calculation, and it lets you compare the rates of different publications with different circulation sizes.

But it has limitations.

For instance, it only works when comparing rates in the same media channel – print v. print or online v. online. That’s because the economics to produce different media – and the results they generate – are so different. Even when using it to compare two similar offers, be aware of these complications:

Ad size: CPM for a half-page ad will be higher than for a quarter page ad in the same publication.

Frequency. The more ads you buy, the lower the price will be for each. That means a single publication will have a different CPM for every ad unit and every frequency rate. The Heights Observer, which offers a pretty typical rate structure, has 60 different CPMs depending on the size of the ad and the number of insertions you buy.

Page size: Move vexing, a quarter-page ad in one publication (The Wall Street Journal, for instance) may be much larger than a quarter-page ad in another (i.e. Reader’s Digest).

That’s why it’s helpful to take CPM a step further – CPM per square inch (CPM/i²).  It’s the cost you pay for each square inch of space to reach 1,000 people. Here’s the formula:

CPM/(height x width)

This will get you closer to that apples-for-apples comparison between different publications. It’s still not perfect. The bigger the differences between two publications, the less relevant CPM/i² will be. But in such cases, it may be the only tangible link for comparing  disparate ad products.

So what’s the best way to use CPM and CPM/i² to make advertising decisions efficient and painless?

Step 1: Decide which publications you’re interested in, based on who they reach and how you feel they’ll work for you. Then look up or request their rates.

Step 2: After getting past the sticker shock, decide how much you want to spend per week, month or year. (Plan to advertise consistently over an extended period. It works best when treated as a long-term investment.)

Step 3: Select ad units in each publication that fit within your price range. Include any extra charges for color. If you can afford a full-page ad in one publication but only a small ad in another, that’s OK. CPM/i² should become a smaller part of your decision but it’s still instructive in your evaluation.

Step 4: Using the same frequency rate (i.e. if you use the 12x rate in one publication, use the closest thing to a 12x rate in every publication), calculate CPM/i².

Now you can evaluate the pricing with confidence, knowing this is as close as you’ll get to an apples-for-apples comparison.

In the end, CPM/i² is only one metric; it should never be the your only consideration. Such factors as a publication’s acceptance among readers, the relevance of its content and its customer-friendliness are at least as important.

Your gut may have to take you the rest of the way.  But you’ll know there is at least some science behind the decision.

Image courtesy of Suvro Datta/FreeDigitalPhotos.net

 

The need for local news

I think Seth Godin is brilliant and I love his blog. But he misses a pretty big point in this post:

Understanding local media

Essentially, he is saying that newspapers must now serve communities of special interests. (Right so far.)

But then he largely dismisses the special interest of a community based on geography.

Here’s the problem: Seth Godin’s brilliance is based on being outside the box. He is a wonder when it comes to seeing things from a different perspective and ignoring the comfort zone.

But when it comes to going home at night, most people want – no, demand – to be in the comfort zone; inside the box. They want to go to bed knowing the things that really matter are working well. Things like safety and recreation and family and comfort.

There are, of course, different ways to achieve that. One, for example, is to live in a gated community where people of different economic, ethnic or racial background have trouble getting in, and where a well-paid management company takes care of the rest.

But another is to live in a community more like mine, with sidewalks and shops and some level of interdependence among its members. Such a community is organic and only works when fragile balances are tended. Which, of course, means that its members feel invested in knowing what’s going on.

Most of our urban areas are surrounded by places like this. And in such places, people DO care about their neighborhoods. Local newspapers that truly foster a sense of this kind of community will continue to thrive in exactly the way Godin specifies. And they’ll do so by being more important than the newspapers that serve the distributed communities he describes. Because, unlike those newspapers – which serve the special interests that make us different – the local newspaper serves the thing that makes us all the same: The basic human yearning to live in groups.

Advertising 101: Frequency v. size v. color

If money were easy to come by, every ad would run in every issue as a full page. But a buck is hard to make and compromises are a fact of life.

So what’s more important: running a big ad or running an ad often?

Advertising – any advertising, whether print, online or broadcast – works best through repetition. Look at it this way: You know that if you send a direct mail piece or a mass e-mail, only a small percentage of recipients will actually open it.

Advertising offers better percentages, but the concept is the same; 10,000 people may read a publication, but only some of them will notice any given ad.

Conventional wisdom in the media industry says it takes 7 impressions to attract a reader’s attention. I’ve never actually seen any research to support this. But I think I know where it comes from. I’ve been involved with research at various magazines over the years that indicated 10% to 20% of readers were able to positively identify whether a specific ad ran in the most recent issue. Larger ads generally increased reader recall.

From that you can conclude an ad needs to run 5-10 times before everyone in the publication’s circulation can be assumed to have noticed it.

(A statistician could find about a dozen things wrong with this statement. And the research will vary widely depending on the publication, its audience, the number of pages and advertisements it contains, and a host of other factors. So please take it in the general spirit intended).

But just because people see your ad doesn’t mean they are currently interested in what you’re selling.

For instance, regardless of how large your ad is, you’re not likely to sell carpet to someone who’s renting an apartment month-to-month.

The more times an ad runs, the greater the number of people who have a chance to see it. Those who will be interested in your product or service are always a subset of that number.

But when that person buys a house and starts thinking about upgrading the floors, you want him to have noticed your ad in the past; you want him to go looking for your ad in the publication’s current issue.

Therefore, successful advertising isn’t just about getting noticed. It’s about 3 things:

  1. Getting noticed
  2. Being remembered
  3. Being there at the right time

That’s why I recommend frequency as the higher priority in advertising. Frequency is a factor in all three things while size is only a factor in No. 1. I’d confidently predict better results over time for someone who runs a smaller ad in every issue than a larger ad sporadically.

Further, spending too much on an ad can harm its chances of success. How?

If you sell houses for a living, a single commission can pay for a year’s worth of large ads. Selling a home is a big deal involving big money, and a big ad to discuss it seems reasonable.

But if you sell haircuts or ice cream cones your ad needs to attract a lot of customers just to cover its cost. The larger the ad, the better it has to perform just to pay for itself.

If you run a hair salon, how many strangers on the street would you have to approach and talk to before one of them says, “I was just thinking of getting my hair done and I’m not satisfied with my current stylist. I’ll head over there right now.” Would it be 100? 200?

Run through the math: If a publication has 10,000 readers, perhaps 1,000 of them (1 in 10) will take note of your ad the first time it runs. If 1 in 200 decides at this particular moment to abandon her old hair salon and try yours, that means it would be unrealistic to expect more than 5 people to walk through the door as a result of the ad. What is a reasonable amount to spend for those 5 people? And because this is an inexact science, what’s a reasonable amount to spend if the first time the ad runs, it’s only 1? Or none? (As in the bottom of the pyramid in the graphic above.)

So be realistic about how much business the ad is going to bring in – especially in the first few months – and don’t sign up for more than you can afford to spend out of existing cash flow. And expect the results to improve gradually over time, until a steady flow of people tells you they’ve noticed your ad.

There are moments when these rules of thumb may not apply. For instance, if you’re promoting an event or have some other short-term message, then it’s most important that your ad gets noticed right away by as many people as possible. That’s when you want to buy a large ad and negotiate (or pay for) the best positioning you can get.

Color too plays a role. Spending extra as needed for color will help get your ad noticed – though it has a lesser impact than size. Also, color probably has more impact on the way your message is perceived than on whether it’s noticed at all.

The small business owners who tend to be happiest with their advertising are those who buy a smallish ad, spend time developing its look and its message, and then commit to running it month after month, year after year.

Advertising works. It’s not so much an expense as an investment. So invest wisely and consistently. Do it in a way that you can afford to give it time to work. If you do, it will make your business better. 

It’s 2013; get a website already

If you ask a room-full of small business owners whether they have a website, a surprisingly large number will look you straight in the eye and say, “I don’t need one.”

This group tends to include some of the smallest businesses, like handymen, gutter cleaners and house painters. But it also includes a surprising number of businesses with higher overhead and more at stake: mechanics, limousine services, even some restaurants and retailers.

But today, a website is like a telephone and a business card: You shouldn’t even think of doing business without one.

Why you need a website

According to Pew Research, one out of three people who own cell phones use them to access the internet to decide whether to visit a business. That doesn’t include the larger number of people who use computers and tablets for the same purpose. Are these all people you don’t want as customers?

For the smallest businesses, a website can act as an extra set of hands – providing information without you having to stop work to answer the phone. It also puts you on equal footing with larger competitors. Finally, in an era when fewer and fewer people use phone books, it may be the best way to make sure people can find you.

Even the simplest website can present your business as organized and serious; it broadcasts that you want people to find you and learn about you. Not having a website says the opposite: that your business is marginal or indifferent.

Here are the most common reasons small-business owners tell me they don’t have a website – along with some push-back.

I get all my business by word-of-mouth: That will likely be the case even with a website. But people who are referred to you may still want to see your website before making a call. You’ll never know how much business you didn’t get because such people discovered you don’t have one.

Most of my customers are older and don’t use the Internet: Are they so old that they’re likely to die before you? If so, the younger customers you’ll need to replace them are more likely to use the Web to pre-qualify businesses like yours.

All my customers are local; I don’t need a website to reach people in Idaho: If a website reaches people in Idaho, it’s reaching more people close to home, because Google and all the other major search engines now use geographic location in determining search results. Reaching people outside your geographic area may not be the goal of your website, but when it happens, it doesn’t cost more and it doesn’t hurt anything.

I don’t have anything to put on a website: In my experience, this is the real reason many people never get around to building a website. When pushed to make a case why anyone should do business with them, they freeze. Organizing the description and value of your business can make your brain ache, but it’s critically important – and not just for your website.

I don’t have time and I don’t have the money for someone to do it for me: If you thought it was important, you would have made time.

Building a simple site

Lots of small businesses have integrated the Internet with their day-to-day operations by building feature-rich websites with blogs and appointment-schedulers and other add-ons. This can be invaluable, but it also costs more money and requires someone to maintain and update content.

You don’t have to do this. A website does not have to change the way you do business. It doesn’t need to have state-of-the-art social media integration. It doesn’t need to be optimized to show up at the top of search engine rankings. There’s nothing wrong with a simple website that provides basic information and seldom changes.

Three things are required to build your first website: A domain name; a hosting service and a simple drag-and-drop platform on which to build your website. All three should cost around $100 a year, and the large hosting services like GoDaddy and 1&1 provide everything you need in one place (and you’ll enjoy it about as much as a trip to Walmart on Dec. 24). If you’re unfamiliar or uncomfortable with the process, ask for help from a friend who has already been through it; it’ll cost you a six-pack.

The harder job for most people is figuring out what to put on the website. So make it simple. I suggest starting with just 4 pages:

Home: The introductory landing page that provides basic information about what your business does and who it serves.

Services: A page that goes into a little detail about what you offer. It doesn’t have to say much – just a list of the things you do.

About: A page that provides background about you and the business; use the same stuff that you say to prospective customers when trying to close a sale or deal with them.

Contact: It’s enough if you provide an e-mail address and phone number. Also include your mailing address – in case somebody wants to send you a check some day.

After the website is up and running, you may decide to add one or two more pages:

  • Testimonials from customers
  • A gallery of photos, if appropriate, of work you’ve done

One warning: Don’t illustrate your website with photos that you “scrape” from other websites or from Google Images. Most of these are copyrighted, require a license and royalties. If you need photos, try FreeDigitalPhotos.net or Stock.xchng, where photos really are free to use as long as you follow their guidelines.

Don’t worry about all the other fragments of knowledge you hear about building a good website. They all have their time and place. But for you, it’s enough to establish your online presence and then get back to business. You’ll be glad you did.