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The Medium and the Message

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Adam J. Stark, founder and CEO of Stark Office Suites, saw the need for small businesses and entrepreneurs to find community in a physical setting. His now four-Westchester location and one NYC-site company, Stark Office Suites, offers big-business amenities, services, and infrastructure in shared office space. When he started the company at 445 Hamilton Avenue in White Plains, he knew he had to fill the space—fortunately, his advertising spending was based on the growth potential of his business. Wise thinking.

When it comes to marketing, small-business owners tend to think small, which results in underspending on advertising. One smart way to develop an advertising budget is to calculate projected revenues over a multi-year span and determine the investment required to produce those results. Thinking long-term allows for long-term planning where promotion and advertising become an investment to future growth.

Advertising costs money and spending money is a necessary cost of doing business. Anthony Maucieri, the owner of East Hill Cabinetry in Briarcliff Manor, competes in a crowded market with a narrow target audience, and thus needs to locate the fraction of homeowners looking for top-class craftsmanship. In business since 2007, his advertising costs represent 10 percent of his annual revenues. The Small Business Administration advises an advertising ratio of 3 to 5 percent of annual revenues. However, during the initial launch a small business owner should expect the percent of advertising to be higher, simply because the revenues are low. Stark estimates that, in the first 12 months of business, his “advertising costs represented sixty cents of every revenue dollar and, this past year, it is down to three cents.”

Calculating an annual advertising budget is just as challenging as figuring out how to spend the money. An obvious choice is to hire a professional. Maucieri works with Co-Communications, Inc., a full-service public relations and marketing agency with locations in Mount Kisco and Hartford, CT. “Marketing is an investment,” says Co-Communications President Stacey Cohen. “There are many variables involved in deciding how much a small business should allocate for their marketing budget.”

Plus, an agency will negotiate rates. “Small business owners get pushed back on price all day,” Maucieri says. “Allowing the agency to negotiate on my behalf gave me time to focus on my business.”

In the early days, Stark was concerned that small companies would be wary of relocating for fear that he was not in it for the long term. So he invested heavily in print advertising over the first two years. The consistent use of print media helped convey a sense of permanence.
Maucieri uses print media, too, to reinforce the company’s image. When an architect refers East Hill Cabinetry, a print ad that a customer can put his hands on adds credibility. In addition to print, East Hill Cabinetry spends 40 percent of its advertising budget on solo direct mail despite a response rate of less than one percent.

“We tried mailers with a broader reach and, although the response was higher, the number of new clients was lower.” Attracting a wider target market actually cost Maucieri more money. “Consulting with a new client on a custom kitchen can take three hours and a few more hours to write up a proposal.” Bringing in the wrong customers was a time and money drain on the business. A very narrow reach with a low response can be much more profitable. “One project pays for it.”

One or two advertisements will not fill your store with customers or overload your voicemail within minutes. “I know every rep says this, but it takes time,” Maucieri says. He has fond memories of the one big order that changed his perspective of time. “We had been advertising in a particular media for nine months, and I was just about to cancel the contract when we got an order that more than paid for the advertising.”

Deirdre Verne is a professor at Westchester Community College, where she serves as the Curriculum Chair of the Marketing Department. Harry Horowitz is the director of the Professional Development Center at Westchester Community College.

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