Lateral Marketing & Small Business Growth

Big businesses do it, and now small business owners are following the trend. No, I'm not talking about spokesmodels, endorsements, or catchy theme songs -- although certainly you could use those if you wish. What I am referring to is Lateral Marketing -- and if used properly, it can be a solid business building tool.

For this example, we're featuring business client The Soap Dish, a family operated business offering a line of handmade Goat's Milk soap, lotion, and sundries. In addition, The Soap Dish offers an assortment of soap making supplies, packaging items, and a full recipe library. It is this selection of items that we will be focusing on for the basis of this discussion.

The owners of The Soap Dish learned, as many small business owners do, that few companies can, (or will) accommodate the unique needs of cottage industries. Many small businesses are unable to meet larger companies' order minimums, or simply do not wish to bring in the quantities needed in order to benefit from bulk rate pricing. This niche provided The Soap Dish with the opportunity to provide a service to other small businesses within the same market.

By ordering basic supplies in larger quantities, The Soap Dish was able to enjoy the benefits of bulk pricing discounts, then pass these discounts along to competitors who utilized these same items. In so doing, their supply business grew significantly, while establishing themselves as an up and coming player in the competitive market of soapmaking supplies. The additional revenue generated by the supply sales has allowed them to penetrate new markets, introduce new product offerings, and update internal systems at a rate that might not have been possible without the lateral expansion. In addition, the availability of a recipe database has allowed new and inexperienced hobby soapmakers a venue from which to gain knowledge, as well as affordable startup supplies. The presence of the resource helps in building customer trust and loyalty -- both are key elements in customer retention.

The basic principles of lateral expansion in this example are quite simple. Look at your existing product offering, and identify items which complement that offering, and also appeal to others serving your general market. Identify a need in the market for the item or service -- based upon price, availability, or strictly on service. Then, develop a solid strategy to satisfy this need. By positioning yourself to meet the challenges created by the need, you also position your business to benefit from the solution you create.

To learn more about The Soap Dish, visit them online at www.TheSoapDish.com.

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About the Author: Traci Hayner Vanover, aka The Promo Diva®, is the owner of The Creative Concept -- providing design, marketing and PR services to small businesses, authors, and artisans in a number of disciplines. When she isn't working for private clients, you'll find Traci designing and editing her print magazine, Create the Dream!™. Traci has authored several small business articles, virtual courses and seminars, many of which are available through syndication, or on her small business promotion website -- the Promo Bistro™.

9 Ways to Increase Cashflow for Small Business Growth

by: Casey Gollan

Cashflow Idea No. 1. Use ‘cashflow’ sales checklists.

For sales people, get them to ask every single customer to make another ‘add-on’ purchase with the one they’ve already made. A great way to do this is to have a shopping ‘checklist’ of what the customer could buy.

Cashflow Idea No. 2. Use ‘cashflow’ payment checklists.

For your administration team. Have a checklist of your customers and when their payments are due. Set up reminder e-mails/sms’s/and faxes for each customer to ensure their payment is received on time.

Cashflow Idea No. 3. Increase your prices.

Most business people are so scared of increasing their prices. Yet when you do you’ll notice a couple of things happen. Firstly, ‘nothing’ may happen! That’s the ideal. Secondly you may lose a couple of customers, but they’ll typically be the ‘hard’ ones to deal with. If you increase your prices by 5 or even 10% across the board you’ve got heaps more profitability, and more room to move in giving great service.

Cashflow Idea No. 4. Invite your past Customers to buy from you again.

Collect your customers details and invite them to come back to your business. Make them an offer, have a VIP sale night, give them a gift cheque to pay for the first part of their purchase, send them a monthly newsletter, telemarket them or let them know you’ve got a gift waiting for them when they call back.

Cashflow Idea No. 5. Change your trading terms.

Good cashflow is all about getting your money in as quick as you can, and paying it out as slow as you can. So change your trading terms to get your sales income in as quick as possible. If you’re at 30 days, change it to 14, 7 or even COD. The quicker your terms, the better your cashflow.

Cashflow Idea No. 6. Pay out slowly.

The other part of having good cashflow is paying out your suppliers ‘slowly’. Do it slowly, but keep a good relationship with your suppliers. So find out when is ‘acceptable’ for them. Currently, you may be paying on 30 days. Yet they may accept 45 or 60. If that’s the case you’ll have another 15 to 30 days to use the money.

Also consider paying on your credit cards. That way you’ll get an extra 30 to 55 days interest free.

Ideally try and follow the 7/60 rule. Have your money come in within 7 days, and pay your bills around 60 days.

Cashflow Idea No. 7. Accept only ‘good’ customers.

In light of the previous two points, only deal with customers that will gladly follow your trading terms. You may not like turning your back on some ‘slow’ customers, but it’s worth it when you get all ‘fast’ paying customers.

Cashflow Idea No. 8. Use only profitable marketing.

Try, test and measure all of your marketing. Financially analyse each marketing campaign so that you know it’s making a profit or a loss. Then use only the profitable ones. You’ll probably find that you’re wasting money on some marketing that isn’t bringing you in any money.

If you’re not marketing, start testing some small ads/flyers/e-mails and keep going until you find something that works, with an offer that works in an ad that works. If you’re already advertising, test your headline, test other offers, test other mediums.

Cashflow Idea No. 9. Get someone else to endorse you

Find someone with a database that’s full of people who suit your target market, work out a relationship whereby you both end up winning and have them endorse you to their database. You may do the same for them, as did a hairdresser and a gymnasium, or a restaurant and a menswear shop.

These 9 ideas can increase your cashflow, and thereby increase your small business growth. So take each idea over the next 9 days and try each one in your business.

Copyright © 2005 by Casey Gollan. All Rights Reserved

About The Author

Casey Gollan, The Business Growth Specialist, the specialist who grows $1 Million p.a. small businesses into $2 to $5 Million p.a. businesses over a 2 to 3 year period. To learn more about Casey's Business Growth Program, visit his site and sign up for 'The 23 Secrets of Business Growth' 2 hour audio program for FREE.

caseygollan.com.au