Share Ad Expenses to Boost Profits

The challenges of the small business owner are well documented. They must battle for market share against larger competitors, run all aspects of their business, and even pay higher rates for advertising and other marketing related expenses. Small businesses generally do not qualify for volume discounts when it comes to buying advertising space or marketing materials, and thus they end up paying higher rates for the same ad space or marketing materials purchased by their corporate counterparts.

In recent years, there have been some changes in the marketplace that are of benefit to small business owners. For example, Internet procurement sites have emerged offering discount rates on everyday office supplies such as toner or paper. However, the high cost of advertising has not been formally addressed. That's why many small businesses are taking matters into their own hands and joining forces in marketing "co-ops".

Here's an example of how it works. Andy's Accounting Firm and Larry's Legal Firm are both small businesses operating in the business-to-business sector. Andy services small businesses with their accounting needs, and Larry is a lawyer specializing in small business issues. Andy and Larry both wish to purchase advertising space in a popular small business magazine. The rate they are quoted individually is $5000 for the back page of the magazine. Since they are not repeat advertisers, neither Andy nor Larry receives any kind of discount. So how do they save money on this advertising venture? A co-op approach on one of two fronts will cut their advertising costs significantly:

Share the ad: Since they are not direct competitors, Andy and Larry could split the ad space 50/50, acting almost as if they were partners although their businesses are distinct. This drops the cost to $2500 for each business and they still receive broad exposure in their chosen publication. In fact, by putting their heads together they should be able promote their collective business expertise as "Total Solutions for Small Business".

Purchase separately at a discount ? There may be some occasions where a business does not wish to share its ad space. Even in these cases a co-op approach can offer a lower cost. Andy could call the publication and ask for a quote on the back page for next month. Once the price of $5000 is quoted, he then offers the publication a deal "What if I bring on another advertiser for you. Would I get a small discount?" Most publications live or die on the sales of their advertising space, and are usually willing to offer someone like Andy a 10% discount for bringing someone like Larry in to purchase an ad elsewhere in the publication. Andy and Larry split the savings and Andy ends up paying $4750 for a $5000 ad. Although the savings were smaller in this case than the shared ad example, remember that Andy now has the entire back page to himself and saves $250.

Advertising is not the only example of co-ops at work. Web Designers would jump at the chance to line up two clients in one shot, and would likely offer a discount to do so. The same applies to a printing company that prints brochures or business cards. The possibilities are endless, including the size of the co-op you choose to join.

When faced with a major advertising buying decision or the need for new marketing materials, find out how much you will have to pay as a small business. Then form alliances with similar small business, and negotiate a better deal for all parties involved.

About The Author

Will Dylan is the Author of Small Business Big Marketing and owner of www.marketingyoursmallbusiness.com. Will also offers article and news release writing services through his website. You can contact Will at [email protected]

In The News:

Small business is big business in SC  Charleston Regional Business
Small Business Hiring Slows  The Wall Street Journal

How to Get Maximum Results With Minimum Effort

Get maximum results with minimum effort. Sounds great doesn't it?... Read More

Dont Let Your Small Business Fall in the FDCPA Trap

When someone owes your small business money, you certainly feel... Read More

Have You Thanked Your Competitors Today?

Competition in the business world is often viewed as a... Read More

Starting a Pressure Washing Business

Are you thinking of starting a small pressure washer business... Read More

But Weve Always Done It This Way

Sacred cows take a long time to die. We get... Read More

Keeping your Business Alive

As long as you eat and breathe you will stay... Read More

Fleet Washing Operations Manual Sample Outline

In the Truck Washing Business every single type of vehicle... Read More

Grants vs. Contracts

Commonly folks have asked me what the technical difference is... Read More

How to Prevent Home Business Burnout

As a home business proprietor, you may already realize why... Read More

Small Business - Big Business...Whats the Diff?

Small Business, Big Business ? What's the Diff?Well a lot... Read More

Dispute Resolution of Territory for Mobile Franchised Companies

Franchisors of home based and mobile businesses need to carefully... Read More

Using Holidays to Put Some Extra Cheer in Your Cash Box

No matter your age or station in life, we all... Read More

Why Does a Business Fail and What Can You Do to Stop It?

I believe the number one reason why a business will... Read More

Financial Strategies for a Mobile Car Wash Business Plan

Writing a business plan for a mobile car wash is... Read More

Joint Venture Your Way to Extraordinary Sales!

You know what makes me really happy? Drinking a Starbucks... Read More

When to Say NO!

When is it a good thing to say no to... Read More

Sample; Territory Reduction Policy for a Franchise Company

I propose this thought on the subject of Franchisee territory... Read More

Contract Cleaners ? A Guide for Business Part 2

In the first part of this article I put forward... Read More

Power Tools for Business

How do we keep track of our business deals?If you... Read More

Home Based Franchise; What About Future Expansion?

As a franchisor I am always asked by new and... Read More

Looking for a Business to Run in the New Revitalized Downtown Area?

Looking for a place to add a Quick Lube away... Read More

Most Franchises Are Small Home Businesses

Many of our nations 400,000 franchisees run their businesses out... Read More

Firing Underperforming Employees in Your Small Business

Here are a few tips on how to hand out... Read More

Creative Business Card Marketing

Announcements can be handed out as a business cardAnnouncements can... Read More

Three Big Barriers To Small Business Marketing Success

When you feel like you're always busy working on your... Read More