Mary Schmidt Marketing Troubleshooter

One of my clients is The Loan Fund, an alternative lending group here in New Mexico. So, I get an insider view of the good, bad, and really ugly of start-up financing. TLF works with clients who can’t qualify for traditional financing - which, given banking regulations and requirements, means most would-be entrepreneurs.

Sure, money isn’t everything, but if you don’t have it, it’s the only thing. Unfortunately, many entrepreneurs “don’t know what they don’t know” when they’re putting together loan applications and budgets - particularly when it comes to marketing. They tend to confuse marketing with advertising (or “branding”) and end up getting scammed by some marketing agency who takes their money and gives them a lot of talk and glitz.

Six “insider tips” re money and marketing:

1. Don’t clean out that piggy bank (or retirement plan or kids’ college fund) from the get-go. Such drastic measures should be the very last thing you do. Once you drain every dime, you’re in panic mode which means bad decisions, missed opportunities…and a miserable life.

2. Guard your personal credit rating with your life - because it can quite literally be your life. With planning and management, you can start and run a business on credit cards. (Over 70% of entrepreneurs do so.) You can even get 0% APR (Discover offers one program where you can lock in 0% APR for life if you spend $25.00 a month on the card. You have to pay interest on the $25.00 purchases, but it’s still far less than you’d pay for - say - a home equity line of credit.) Of course, neither TLF nor I recommend using credit cards as the first choice financing method but it can work. The founders of Google ran their company for two years on personal credit. My ex-husband and his brother started a software company on credit cards (My ex had up to $100,000 on his Am Ex). They sold the company after a couple of years and became multi-millionaires. (Note: Both Gerry, my very nice and smart ex, and Geoff, his brother, were extremely methodical and planned for success.)

Your credit rating also goes a long way with alternative lenders - and the SBA. The SBA offers The Community Express program, in which you can get loans from $5,000 to $50,000, with a reasonable credit rating and no collateral requirements.

3. Set goals before budget. Otherwise, you’ll find yourself not doing something critical to success because “I can’t afford it.”

4. Have a budget, with timelines and measurements. Yeah, “duh-oh!” but many people never do this and then wonder why their marketing is a waste of money. Know what you expect from any expenditure. Don’t, for example, write a check for $10,000 for late-night local television spots - unless your target market is unhappy insomniacs or drunk college kids.

5. Set aside some funds for wild ideas. Opportunities will come along - and you may want to try something new. So, if you’ve set aside a marketing idea fund, you can afford to gamble a bit. If it doesn’t work, well, you tried it, learned the lesson and moved on. No harm done.

6. Shop around for financing. Banks may not be the best option, but there are people that work at banks who want to help people. They may not be able to make you a loan but they can give you advice and referrals.

Bonus Tip: Just as you think of alternatives for financing - think of alternatives for marketing. How can you personally reach the people to whom you want to sell? Doesn’t do you much good to advertise or have a web site if your target market doesn’t listen to the ads or use the Web. For example, here in New Mexico, we still have a lot of wide open spaces - with wide spots in the road having a coffee shop or market that’s the local gathering place for everyone - so with TLF, I’m doing more what I call “coffee shop marketing” - talking to the locals, posting materials on the bulletin board (people actually read that stuff) and so on. “Brand? That’s something we do with our cattle!” Logo, schmogo. These folks want to look you in the eye and shake your hand.

Read More: Want Funding? Think Like an Investor. (a two-page PDF with ten tips.)

Related Posts:
Three Ways to Waste Your Marketing Budget
Start-Up Suicide: Free Business Plan Help
Advertising Does Nothing for Your Brand
Small Is a State of Mind

Please leave your thoughts on this! It may take a bit for your view to show up since I hate making people type in little letters (I can’t read most of them myself) - so I moderate all comments. Feel free to disagree - debate is healthy, but do act like a grown-up. And, I’ve blacklisted the worst obscenities, including the “f” word, as part of the troll wall.

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Tags: marketing, marketing troubleshooting, marketing plan, entrepreneur sanity check, start-up financing, The Loan Fund