When it comes to small medium sized enterprise, the owner manager knows that the start-up doesn’t have much finance and resources and needs to survive, and since its new its not even credible enough to apply for a bank loan so what must it do to promote itself or in other words what is it suppose to place in the marketing plan, if there is going to be seed financing or self financing or mortages only and why is that venture capitals won’t support sme’s on early startup?
Lets take the latter first, venture capitals don’t fund sme is because SME’s usually target market that is too small that won’t cover the overhead costs of the venture capitalists. The sme invest in small markets because there are larger risks involved in entering a bigger market with a lot of competition.
So if we suppose the sme is a retail store, who has to begin to invest in marketing what guidelines could be helpful I asked, the following are 10 tenets according to to (Zimmer & Scarborough,2005)
1. Invest time, energy and not just money
2. Use good sense to make up for experience
3. Measure success by making profits and not sales
4. Focus on excellence and not only diversification
5. Place existing or making larger transactions with the existing customers and referrals and not just adding customer
6. Use a combination of marketing strategies instead of sticking to one that appears to work
7. Look for free ways to promote the business
8. Keep track of the number of relationship they establish and not just sales, add drama to their potential activities and products in order to get customers attention
9. Invite their customers and get involved
10. Communicate in a believable and clear manner.
In my opinion these 10 tenets are another form of bootstrapping as will my next post will discuss.
Reference
Zimmerer,W.T & Scarborough, N.M (2005).Essentials of Entrepreneurship and small business management (4th ed.).New Jersey; Pearson Education Inc.