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2014-02-24
Marketing for startups


Goodwill is an intangible asset which builds up over time. It is important to understand this concept, especially when starting up a new business.

This is relevant to SEO as will be explained below:

Let’s use an example of a young professional who graduates and starts his own business. (It can be an attorney, accountant or dentist for example.) . This applies to most running concerns.

Let us say he starts his business with a loan from the bank. At startup his balance sheet will look something like this:

Assets

Furniture & Fittings

R100,000

Equipment

R150,000

Motor Vehicle

R100,000

Cash in bank

Total assets

R10,000

R360,000

Equity & Liabilities

Capital (Own contribution)

R10,000

Loan from ABC Bank

R350,000

Total Equity & Liabilities

R360,000

 

At start-up he has no client. He has no systems in place. No business website and no accounting system.

 

25 Years later his business balance sheet might look like this:

Assets

Furniture & Fittings

R 1,000,000

Equipment

R 1,500,000

Motor Vehicle

Goodwill

R 1,000,000

R 2,000,000

Cash in bank

Total assets

R   100,000

R5,600,000

Equity & Liabilities

Capital (Own contribution)

R5,600,000

Loan from ABC Bank

R0

Total Equity & Liabilities

R5,600,000

He can now consider retiring and sell the business for R5, 600, 000. Included in the selling price is the intangible asset called goodwill. What does that represent? It represents clients returning to the business, it represents the staff which has been recruited and trained, the accounting systems which has been put in place. It represents the good name of the business. (With a lot of small professional businesses goodwill is often attached to the owner of the business but there is a way of handing over the business to the new buyer over a 6 or 12 month period.)

Why is this relevant to SEO?

I see far too many businesses started without considering a website, without planning for a marketing budget. These day’s banks will not give you a loan without a business plan. Your business plan and your marketing budget should include planning for start-up expenses.

As we have discussed in the section, the real SEO problem, time = money for the small business owner.

SEO is generally a long term strategy which bears fruit in the longer term. You invest your time in creating content for your website. In this example you will have no clients who can supply you with a client testimony. You will have be able to photograph your new offices, yourself and your fancy equipment but you will not be able to photograph your happy staff or clients and ad that to your website. You will have no success stories or case studies to share on your website. You will only be able to share some of that which you have learned at University or you will be able to discuss issues relevant to your industry. Doing this is fine and the right thing to do over time but it will take a long time to give you the results which you need.

You will need to start your business with a marketing budget. Your first 6 months marketing budget should look something like this:

 

March

April

May

June

July

August

Website

5,000

2,500

1,000

150

150

150

Google Ads

10,000

4,000

2,000

2,000

1,000

1,000

Brochures

1,000

0

0

0

0

500

Signage

3,000

0

0

0

0

0

Print ads

3,000

1,000

500

500

500

500

Total

22,000

7,500

3,500

2,650

1,650

2,150

 

 

 

 

 

 

 

Your revenue could be projected in the same budget as

New clients

40,000

70,000

80,000

100,000

110,000

120,000

Returning

 

5,000

7,000

12,000

16,000

20,000

Total

40,000

75,000

87,000

112,000

126,000

140,000

Where will all these new clients come from? Some will come from your Google Advertisements. Others will come because they were referred by the first clients who first walked through the doors because of your website and because of your initial marketing efforts. In month one you will be spending more than 50% of your business turnover on advertising and marketing. Only from about the second month can you start to expect clients to find your business website because of organic search results. It will start with a trickle but it will increase over the months and years which follow.

At the start-up of a new business you will have to have a marketing budget. The benefits of the initial marketing spend will last you years to come. Clients need to find you once via a Google advert to return to your business time and again, if they are happy with the products and services received.

At start-up a new business website on its own can only do so much for you.  You need to consider advertising to people searching for your services. In this example used, your accounting, legal or medical services.

You will be new in business but you can create a bigger image with your new business website. You can create the image of being experienced. You will not have any of your own case studies, a delicious ingredient of good content to share with potential clients. You can discuss other’s case studies.

 

You will be in the face of people at the time that they are actually searching for your services as opposed to a radio advert, printed media advert or as opposed to them driving past your new offices and noticing your sign board. You will be in business from day 1! The last thing you need after years of study and qualification and after getting the business loan is to be ready and not have clients walking through the door.

On-site SEO takes longer to bear fruit than an immediate Google advert. You should launch your new business with a great looking website and a healthy marketing budget to get started.

The benefits of the initial marketing budget will last you a lifetime.

You will recover your initial expenses over time and you will end with a valuable asset called goodwill. For you to be considered a running concern you need clients. When that starts to happen you ca start adding goodwill to your balance sheet.

Why Relevant SEO Information for small and medium businesses?

There are a host of free information on search engine optimization already available on the internet. Unfortunately for small and medium business owners some of the information is irrelevant. To get to the highly relevant information you have to “eat” your way through irrelevant information. Below Pie Chart explains the problem.


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