I am starting a new public accessible prototyping lab in Huntsville, Alabama, called MindGear Labs based on the fab lab model. I’ve dreamed of becoming an entrepreneur and have done a fair amount of research on the topic. But this is my first attempt at starting a business. Here is where I document weekly my mistakes and successes in creating a business from the ground up.
Huntsville is a great place to live and raise a family, but people don’t move here for its exciting night life. So its things like the opening of a new restaurant that gets a lot of attention. In the past 15 years I don’t recall seeing a mid to large size restaurant open in this town without it being flooded at opening. Generally you’re looking at 1-1/2 to 2 hour waits on weekend evenings, and not much shorter than that the rest of the time. I took my family to a restaurant this morning that I had not been to in years. There was one other person in there, a friend I haven’t seen in months. I remember waiting in lines stretching out the door just a few years ago. I’ve joked that if you’re goal is to make money in this town you should start a new restaurant with the intent of closing it 6 months later. Given the success rate of restaurants, this seems to happen a lot anyways.
Since I’m not planning on serving food (other than a cooler of water and soft drinks) I have to make more of an effort to attract customers than putting a sign up on the side of the road. The sign is important though, I mentioned before that location and marketing budget goes hand in hand. The more you spend on a good location the less you have to spend on advertising. And vice versa. The place I have my eye on is on a side road off a main artery, so not out in the middle of nowhere, but I have to do more than hang a sign.
The second thing I have done as marketing is this series. These posts were originally more for me to start conversations about topics I was working on to solicit advice. Crowdsourcing my business plan, as it were. After all, GeekDad has a national (and international) voice, and MindGear will have a primarily local customer base. I’ve had a number of people contact me giving advice that will save me time and money, but I’ve also had some local Huntsvillians tell me how interested they are in MindGear. Those e-mails have been great for me; I’ve needed the encouragement at times. But the number of contacts aren’t to the level where I could print out the list, hand it to the bank and prove to them that I have the customer base to make this work.
As I’ve refined my business plan I’ve spent a lot of time researching marketing strategies. But how much to spend and where to spend it is complete guesswork -unless someone out there has the equation I haven’t been able to find. I originally expected to find some metric relating to average advertising cost per customer or similar that I could use to define an overall budget. Of course there is the cost-per-click rates for website advertising, but that doesn’t include conversion rates on those that do click. After all my research I picked a cost per customer out of the air, based on what I thought I could afford and still stay solvent.
Next was how to spend my budgeted advertising dollars. There are a lot of different methods to get out in front of the public. The partial list I’ve come up with includes traditional methods such as radio spots, billboards, newspaper ads, trade magazines, mail-outs and posting flyers. Then there are the options that tend to take up more time but cost less money, such as networking, deals with other related businesses, networking, getting set up with the local chamber of commerce, creating displays for local non-profits that have high visibility – i.e. museums and parks, and networking. Add to that the internet methods such as developing a website, blog, posting on Twitter, Facebook, LinkedIn, Google+, banner ads, e-mail lists, Groupon, YouTube etc. Having collected a mountain of information on the cost and effort to implement these marketing channels, now I simply have to figure out which ones I think will be the most cost effective. No sweat. And hope my advertising cost per new customer projection is close to true.
My son told me last weekend that he tells all his friends to tell their parents to come read these articles. My first reaction was gratitude that he still finds this interesting. I’d much rather be able to share this with him than not. My second reaction was I hope he isn’t talking the ear off the entire fourth grade (he’s the most gregarious kid I’ve ever known). I was going to warn him off but I don’t want to squelch that friendly instinct, especially after having to drag myself to networking events. And besides, word of mouth is the best advertising you can’t buy.