How To Set Up An Advertising Group To Sell, Sell, Sell!

There are several fundamental problems facing business start-ups and chief among them is raising financial capital to support operations, production, marketing and sales. Obviously, sales are the most important activity for a business but is often at this point, with a lack of sales, when the reality sets in that without money you cannot advertise in any meaningful way. Even something as simple as classified advertising requires a meaningful advertising budget in order to test ads, fail, adjust, test, fail, adjust until you find the winning ad. When considering other advertising like newspaper ads, direct mail, radio and TV spots, advertising budgets morph into something outside the reach of most under-capitalized business owners. Even Internet advertising can be cost prohibitive, especially when you consider the "cost- per-click" and the low conversion ratios. You can have the best product or service in the world and if you cannot afford to advertise it, you won’t sell it. The exception to this statement is if you have an outside sales force, which, by its very nature, is another expensive and cost prohibitive option for a start-up. Obviously, there are exceptions to every rule but for most start-ups, these are the realities.

So what can you do to raise money to advertise your wares on and off line? One answer is to form an advertising group. One of the best ways to from an advertising group is to put together a LLC (Limited Liability Corporation) which has the benefits of a corporation and approaches the simplicity of a sole proprietorship or partnership. The purpose of the LLC is to recruit investors to invest into the group for the sole purpose of advertising the product or service. Among the benefits of having such an advertising group is the fact that investment risk is shared with no single investor carrying the burden alone. Additionally, the advertising group can be active investors meaning; that the group makes advertising decision as a mastermind group, sharing the risk and rewards of decision making thereby removing the burden from you to call all the shots. It is a way for you to arrange a board of interested directors who have a direct responsibility for the success of the group. It gets the investors involved in the advertising and selling aspect of a product or service while keeping them separated from the original business. For example, you could incorporate your start-up business and hold all the stock and, incorporate the advertising group and give away 90 percent of the stock (retain 10% for yourself) in exchange for investment capital. In this way, your core business is specifically focused on operations and order fulfillment while the advertising group specializes on advertising and selling what your core business provides. You can keep 100% ownership and control of your core business and share in the ownership of the advertising group. If the advertising group fails, your core business remains intact. This way, you can set up another advertising group and try again with another group of investors. By having the investors actively engaged in the advertising decisions of the group, their success or failure is ultimately their responsibility.

You will need the services of an attorney to make sure you are in legal and financial compliance with city. State and federal authorities including the FTC and SEC laws regarding stock sales. One way to overcome the cost of legal and accounting services is to offer the attorney and accountant 5 or 10% ownership in the advertising group in exchange for services (a performance agreement based on results). These two key players, if selected correctly, can help recruit investors and lend credibility to the advertising group start-up.

If you would like to learn more about advertising and selling on limited budget, visit our site and go to the product menu, click on business kits and look for the business kit called "Advertising Works". It is jammed packed with critical information to help you set up a small business advertising and marketing machine to sell, sell, sell! While you are there, check out our Smartie business E-books too!

To your unwavering success!

Copyright © 2006 James W. Hart, IV All Rights reserved