Small businesses that spend more, spend smarter

Could small businesses that spend more actually be spending more wisely? If it's toward marketing, a new study says yes.

For small businesses who don't have large advertising budgets, the effect of every dollar spent on marketing is amplified. A report by BIA/Kelsey, entitled "LCM: SMB Plus Spenders," found that 152 "plus spenders," small- and medium-sized businesses that spend over $25,000 on operations, use an average of 6.5 types of media versus 3.1 kinds for average spenders.

The study revealed that "plus spenders" spent 26 percent of their average budget on online media efforts compared to "core spenders," which allocated 21.8 percent. Additionally, "plus spenders" put 16.1 percent of their budget towards broadcast media while only 1.3 percent of all small- and medium-sized businesses invested in broadcast media.

However, not all businesses are able to spend such large amounts on marketing. The study advises that "core spenders" borrow some simple, cost-effective strategies from their better-funded counterparts, such as setting up a fully-functional website - something that 90 percent of "plus spenders" have.

Another innovative strategy that businesses are using involves "sizzle reels" - 3-to-5 minute videos that create an overview of a product, service or brand, Entrepreneur magazine writes. These videos work particularly well as part of a business' B2B strategy.