Working with Small Businesses – A Love/Hate Relationship

The BLU Group – Advertising and Marketing has been in business for 8 ½ years. We are a full-service ad agency that got its start in a basement and now serve a variety of niches, particularly small businesses in a particular region. Without these small businesses, there would be no BLU, but as we continue to evolve as an agency, look to expand our reach into larger markets, and grow our bottom line, our dedication to helping small, or more appropriately, micro businesses becomes more difficult.

Micro and small businesses (under 30 employees for the purpose of this post) are wonderful to work with for a variety of reasons. Here are our top 3:

1. Great People – Small business owners usually are very dedicated to their company, their employees, and the communities in which they live. We have broken bread, had more than one drink, and shared various stories with almost every one of our clients. They are our neighbors, friends, and we get along with them very well.
2. Passionate – They are hard-working and believe deeply in the products and services they offer their customers. If you want to learn about what these companies offer and who they serve best, just ask them. They should be able to tell you very quickly.
3. Relationship-Oriented – Most companies get their start through the relationships they build with the people around them. Small businesses are great at servicing people one-on-one and take pride in the equity these relationships have in their business, and sometimes personal, lives. The phrase “Nothing Personal, It’s Just Business” does not fly with these people. It’s almost always personal.

For some companies, working primarily with small businesses may fit perfectly with their long-term goals (i.e. they want to stay small, don’t have any employees/overhead, or are very niche oriented). For The BLU Group, we have hit a point where working primarily with small businesses has become an inhibiting factor to future growth. Here are our top 3 opinions on why this is the case:

1. Cheap – For the most part small businesses are very cheap. We work in the service industry where ideas and creativity are our primary products and they do not seem to be able to grasp this concept and/or want to pay for it. They are used to paying $XX for a widget, but paying $XX for a strategy, idea, concept, project management, final creative product, etc. does not seem to compute. You would not believe how much time we waste trying to justify a $25 or $50 charge for the work we do – even with good communication beforehand. We understand it’s their job to watch every nickel and dime, but at what expense?
2. Too Busy – When you work with small businesses, there are usually not a lot of different departments with people dedicated to specific tasks, i.e. marketing. This usually falls on the owner or one of their managers. The problem with this, beyond #3 below, is that things take an extraordinary amount of time to get done because they have so many other things on their plate. From follow-ups to e-mails to concept approval to content delivery, we have seen projects take a year and half when the actual work should have only required 1-2 months. These delays not only negatively impact our production schedule, but causes the project to run over on time since much more time is needed to manage the project and continually pick it up. Plus, it hits us where it hurts most – in the pocketbook. Sure, we can and have issued cost alerts and payment deadlines, but they don’t like those either.
3. Ignorance – Small business owners are usually smart and have a good understanding of what it takes to run their business, but we have found that marketing is typically not one of them. You may or may not be surprised at how many companies got their start, and continue to run, without a marketing plan. They go with the flow and fall victim to the best radio, TV, yellow page, newspaper, or billboard salesperson, and then wonder why things aren’t improving. Even worse, they rely on these salespeople to drive their marketing plan (Hint: the reps only get paid when they sell you their  media).

   In addition, and due to their history with media sales reps, many expect to get the services we provide for little to nothing because the reps usually throw it in. They are surprised to learn that coming up with a big idea, developing that idea, hiring talent, managing the work, and ensuring everything goes off without a hitch, actually requires funding that is more than three digits left of the decimal point. Add this to the fact that we have to train many of our clients on standard processes, procedures, delivery mechanisms, expectations, and the benefit of long-term branding strategies, and you can see how eventually the return on investment just isn’t there.

The summer of 2012 represents our company’s next step to something bigger and better. We will no longer actively pursue local, small business accounts. Our efforts will be focused on our existing small business clients and companies that understand the expertise and value we bring to the table AND have the resources to invest in them, both financially and personnel wise. We continue to get calls from local businesses and will always take the time to talk to them, but we are cutting to the chase much faster to see if they fit into our future plans versus just theirs. We love small businesses and the people that work there…we just don’t love working with them that much for the reasons outlined above.