What's the Best Way for Today's Startups to Spend $50,000?
By Robert Cordray
Creating a successful business is difficult, as there is a lot that goes into taking a company and turning it into one that runs efficiently and effectively. For this reason, when a startup acquires funding (from investors, universities, or any other method), spending it intelligently is vital.
For this article, however, let's assume funding has already been acquired and present a hypothetical (but typical) situation - a hot new startup just got awarded $50,000 for winning a technology contest at a local university. What should these savvy young entreprenuers spend it on?
Most startups will initially want to spend money on marketing, because as a startup, nobody knows who they are, right?. But brands (startups too) must be very careful with marketing spend as it can can be quite difficult to quantify progress and track bottom line ROI - at least without the right tools in place. So, first and foremost, startups need to get all the neccessary analytical tools and data pipelines in place before they spend money on anything else (marketing and advertising included); otherwise, it is impossible to know if your spending has any impact on ROI at all.
That being said, it is most effective to simply hire an agency or an in-house analyst to do all this (set up analytics pipelines) for you, but you need to be aware of some basic concepts so you as a startup business owner can keep the team that you build accountable. You also need to know how all this data translates into real value for your enterprise, which is why I recommend being familiar with the following:
- Site-wide Analytics: I always recommend Google Analytics for gathering data from site-wide interaction. There are other enterprise options like Adobe’s Site Catalyst, but for the most part Google’s free offering is totally sufficient. You need a solution of this type in order to track which marketing campaigns and sources are driving traffic and most importantly what channels are driving traffic that converts.
- SEO Analytics - Products like Bright Edge’s SEO marketing platform, or Moz’s SEO toolkit, allow enterprises to track rankings, new links and traffic sources. Combined with a system like Google Analytics, brands can get a very clear picture of what part of the marketing budget is actually working and having a positive impact on the web presence (which correlates directly to how much exposure your company is getting).
- Social Analytics - This one is a bit new, but probably the most effective. Tools like Topsy and Buzzsumo let brands track social shares, interactions, and content performance. If you are paying for influencers to promote a company, you can see directly how much value in the social sphere their marketing efforts are netting you.
Once analytics systems are in place, go ahead and start spending some money on advertising and marketing. Traditional advertising on radio and TV, PPC (pay-per-click), and social advertising are all viable options. Check out Website Magazine's 'Net Advertising channel for some inspiration.
Now that you started traditional advertising, spend some money on a Social Marketer. Social Media is fast becoming a powerful method for connecting to potential customers. It used to just be Google and their almighty search results, but consumers are now finding content and products on the web through social channels more and more. As time goes on, its likely only going to become more prevalent.
Pay someone to build all your social channels and make them work in unison with your traditional advertising efforts. There are agencies starting to pop up that focus solely on social marketing. It's not a bad idea to try one out for a few months. Since you have all your tracking tools in place, it won’t take long to find out if they are bringing value to your business.
Some of this $50,000, of course, must be spent on hiring someone to keep track of all that money. Most business owners don’t want to spend their time managing books. If you don’t have a solid accountant, get one. Plain and simple.
Building a Team
Last, but not least, some of the $50,000 should be spent on putting together a team of employees who can be trusted. If all your advertising efforts are effective you are going to need a workforce. Make sure that everyone involved is working for the same cause and that all care about seeing this startup take off (instead of their own personal gains). Be wary of employees that want to “ride your coat-tails” so to speak. If they are not passionate they will slow your progress. As a startup you cannot afford to have employees that are working “just hard enough to not get fired”, you need employees that are as invested as you are. They need to have some skin in the game. Once that is taken care of, the startup has the fundamentals covered. With the right marketing, advertising, budgeting and employees in check, this startup is headed for nothing but success.