How to advertise a new business: the first £1,000

Key takeaways

To advertise a new business, set up the free foundations first, then spend the first £1,000 on finding out what brings a customer. That means small, tracked tests in one area, mostly on social media, and nothing that locks you into a year's contract.

• Free first: listings, profiles, reviews and signs.
• £1,000 is enough to test one or two channels properly.
• Aim for learning: which message brings an enquiry?
• Sign nothing longer than three months.

What is different about advertising a new business?

A new business has no reputation, no reviews and no data. People cannot search for a name they have never heard, and you do not yet know which message works. The first job of advertising is therefore to learn quickly and cheaply, not to look established.

• Social media marketing vs traditional advertising: what works better for SMEs?
• Social media for a new business: the first 90 days

What should be in place before you spend?

Put the free foundations in place first, because adverts send people to check them.

• A Google Business Profile with photos and hours.
• One social profile with at least nine posts.
• A simple website or page that takes enquiries.
• The first five reviews, from genuine early customers.
• A way to log every enquiry and its source.

• Google Business Profile vs social media: what comes first?
• Free advertising for small businesses: 12 ways that work

How should the first £1,000 be spent?

Here is an illustrative split for a local service business. Adjust it to your trade.

• £450: paid social in your postcodes over six weeks.
• £350: one leaflet drop to your best 3,000 homes.
• £150: design and photos used in both.
• £50: tracking, such as a dedicated number.

• The minimum budget to test an advertising channel properly
• Leaflets vs social media ads: which wins local customers?

Why start with social media?

Start with social media because it teaches fastest. Paid social, from £300–£500 a month, shows within a fortnight which photo, headline and offer people respond to. Use what you learn to write the leaflet, the sign and the website, instead of guessing in print.

• Facebook ads versus boosted posts
• Choose the right social media platforms for a UK small business

Should a new business focus on response or brand?

A new business should lean towards response. Research for the IPA favours a balance of brand building and activation for established advertisers, but a firm with no customers needs cash and proof first. Build the brand through consistency: the same name, colours and line on everything from day one.

• Brand building vs sales activation: the small business view
• Consistent advertising across channels: one look everywhere

What should you avoid in year one?

Avoid long contracts, large print runs, broad regional media and anything sold with a deadline. New businesses appear on public registers and attract advertising sales calls within weeks. Take the details, say you will decide after your first test and compare everything with your cost per enquiry.

• Twelve-month directory or magazine contracts.
• Ten thousand leaflets to get the unit price down.
• Regional radio or press beyond your area.
• Paying for followers or reviews.

• How to negotiate advertising rates as a small business
• Advertising mistakes small businesses make, and the fixes

How do you get the first reviews and referrals?

Ask early customers directly, at the moment they are pleased, and send a link. Offer to do a small number of first jobs for people whose honest feedback you can share. Reviews must be genuine: fake and concealed incentivised reviews are banned.

• Word of mouth vs social media: can referrals be scaled?

When should you spend more?

Spend more when you know your cost per customer on one channel and it is below what a customer is worth. Then scale that channel in steps and begin a second test. Until then, more money only buys more guessing.

• Cost per lead by channel: comparing social media and offline
• Advertising payback period: how long until it pays for itself?

What does this look like in practice?

A pattern we see with new firms: the launch budget goes on a logo, a wrapped van and a year in a directory, and nothing is left to find customers. The firms that get going fastest keep the launch modest and hold back enough for two or three tracked tests.

• See client work
• Social Media Marketing for UK businesses

Next step

Write down what one customer is worth to you in gross profit. That figure tells you how much you can pay to win one, and how far £1,000 should go.