Marketing your startup to build confidence, not sales

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A startup business only grows when there’s an investment in the business, but as a founder, how do you invest when cashflow is still unpredictable? This is the catch 22 that many business owners face.

The obvious answer is to grow sales and then use the additional cash to build the business, but interestingly, this is often not the best option. More sales equal more operational challenges, especially on the back of existing capacity constraints in growing businesses. Simply boosting sales can kill the company.

So what’s the answer? How do you invest in the business when money is scarce and additional sales unwanted? The answer lies in betting on market demand, rather than sales.

There is a comfort to be found in knowing that your services are in demand, even if there are no sales. Demand is what makes the phone ring and therein lies the confidence that you can invest in your company. Never mind sales; healthy demand allows you to live in the future.

But how do you raise demand without growing sales? The answer lies in branding and marketing - not traditional sales-driven activities. To put it differently: you merely want to flirt with the market - not go all the way.

Small businesses often say they don’t have money to invest in branding and marketing, and that they will secure initial sales through their network. But this leaves them vulnerable to the tense interrelationship between operations and sales. A heavy sales approach puts the business under pressure to deliver and avert the nightmare of negative reviews and a poor image.

By focusing on branding and marketing a company can raise awareness and interest and then invest on the back of this without yet taking on the pressure of actual sales. It is one thing saying no to an order. It is a different thing saying yes, and then dropping the ball.

It is counter-intuitive, but as a startup, you should invest in your brand and marketing promotions - not because you want the sale, but because you need the demand to allow you to equip the business for when you decide to open the flood gates.

Making a sale is your choice, as long as the phone is ringing.

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