By “efficient marketing model,” I mean a proven way to acquire customers without going broke. This may seem ridiculously obvious, but the truth is that many start-up businesses do not have this.
Most of the business plans I look at have unrealistic expectations about marketing. Two key issues, in particular, are usually off the mark:
1. How much it will cost to acquire a new customer
2. How many new customers can be acquired in a given time
If you get the wrong answer to either of these questions, you will usually go broke because you’ll be spending money on other aspects of your business—product fulfillment and administration, among others.
That will deplete the funds you need to reach the point at which repeat and back-end sales begin to cover expenses. The primary benefit of Rule No. 1—starting with a business you know—is the knowledge you have of this one aspect of business: how to acquire new customers efficiently. Every sector of every industry has its own model. And many individual businesses within a particular sector have their own peculiar formula for bringing on new customers. You can’t possibly expect your home-based business to succeed unless you have a very good idea how you are going to attract new customers efficiently. And you can’t do that unless you have working knowledge of how other, similar businesses have done so in the past.