Every Small Business Needs a CAP!

Published on: August 28, 2010

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Let me explain what a CAP is. CAP stands for Customer Acquisition Plan. As a small business owner and teacher of entrepreneurship, I firmly believe that every small business needs a plan to consistently and habitually go after new customers. Unfortunately, most small business owners only think about doing something to get new business when times get tough and sales are down. They then spring into action trying to lure new customers. This is the wrong time to try and get more business.

No matter how good you are or how much you offer, new business takes time to grow. The planting analogy is a perfect way to understand how a CAP works. Think of going after a new customer as planting a seed. The more seeds you plant, the better the harvest you can expect. But seeds do not grow overnight—they take time. In most cases, you have to go back to the place you planted the seed to cultivate and water to make it grow.

Very few people buy the first time they see something. People take time to make a buying decision, and most people need to be exposed to something three to five times before they even start to think about a purchase.

Sixteen years ago, a very good friend of mine decided to start a financial consulting business. Before he launched his new business, he met with a wise mentor to ask for advice. The wise mentor told him this: “Spend at least four hours a week doing nothing but finding new customers. This is easy to do at the beginning of a business, but even if you have more work than you can handle, do not let anything interrupt this four-hour period. Pick a time that you can commit to every week, and for that period do nothing but go after new business. If you do this, I GUARANTEE your business will succeed!”

Well, my friend followed the advice of his wise mentor. Now, 16 years later, he still spends from 8:30 a.m. to 12:30 p.m. every Friday morning going after new business. We all know how fickle the financial industry is, but through all the ups and downs, my friend’s business not only survived, but also thrived. If you ask my friend the reason for his success, he will tell you the story of his wise mentor. He will also tell you that making a habit of spending four hours a week finding new customers was the best advice he ever received.

A marketing plan is an essential part of all business plans. Most people think of a marketing plan as spending money to get your name “out there” to potential customers. They think that marketing and advertising are the same thing—and the only way to market and advertise is to spend money.

When I look at all the businesses students in my classes have started, I find that there is lot more prospecting taking place than marketing. Most small businesses have very limited budgets to spend on marketing. They do, however, have time and energy to spend on prospecting.

I am so sold on the CAP process that just last year I changed the marketing plan section of my college Business Plan class to a CAP section, which includes both marketing and prospecting.

Let me give you two examples of a CAP. One of my students, a young plumber working out of his house, developed a CAP where he spends a minimum of four hours per week knocking on doors of houses within a five-mile radius of his home. If no one is home, he leaves a simple yet valuable checklist for the homeowner. If someone is home, he introduces himself and asks if the person has any plumbing concerns. Over the course of a year, he will have been to every home in the five-square-mile area where he lives.

The second person is a photographer who doubles as a single mom with four kids. Her CAP involves putting all the kids in the van and, for four to six hours a week, she drops off a simple brochure and business card (printed herself) in the newspaper tubes attached to area mailboxes. Her kids love it because they get to be part of the process of helping mom. Every week, she gets two to four calls—and from those calls books one or two sittings.

CAPS don’t have to be complicated; they just have to become a habit. If you want your small business to succeed, start the CAP habit immediately and let nothing get in the way of going after new customers.

If you would like to learn more about CAPs, or get the inside scoop on business entrepreneurship, please feel free to e-mail me at bob.voss@dctc.edu—or visit www.dctc.edu.

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