Starting up in a soft market

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(FORTUNE Small Business) -- Dear FSB: I am looking to open a gift basket business in the spring. With the economy as it is, would it be wise to just focus on business customers?

- Sheli Jones, Burleson, Texas

Dear Sheli: Business customers can provide higher margins and order products in larger quantities, and they may be less price-sensitive than the consumer market.

But they're also likely to be more demanding in terms of quality, accuracy and efficiency, says Willis Turner of Richmond, Va.-based marketing consulting firm Huntsinger & Jeffer.

Consider servicing the consumer market until your business is well on its way, says Scott Robbins, CEO of Midwest Direct Marketing in Spring Hill, Kan. Remember that successful service companies start small and focus regionally, Robbins adds.

Both consultants point out that it will take time to earn the attention of business customers. Start boosting your visibility by participating in business conferences, local community affairs events and chamber of commerce meetings. "That means lots of events and shows," says Robbins.

Use every inexpensive communication device available to you, including press releases, newspaper inserts and trade journal and newspaper advertising. Devise special offers, especially around the holidays.

You may want to initiate a small, targeted direct mail campaign, which can be tailored to specific types of businesses by region, Turner advises. But remember to match your expenditures to potential revenue, and stay focused.

"Even a simple postcard with a strong offer sent to a targeted list will probably generate a better return on investment than a more costly brochure sent to a broader market," Turner says.

However, once your business is ready for expansion and you have the capital, you should consider mailing a small catalog to a target list of business prospects.

And remember, preparing a complete three-year business plan with sales projections helps you set realistic goals and manage your expectations.

"Take your time and grow with the business," Robbins says.