Marketing Budget Plan Tips That Really Work

Marketing Budget Plan Tips That Really Work

2018-03-08 20:25:17 | Khylie Gardner | marketing tips

Building a successful small business can be an overwhelming process. On top of the day-to-day operations, there are also a plethora of financial considerations to undertake on any given day. Is a supplier overcharging you? Can you cut down on your overhead? If it feels like you’re barely keeping your head above water financially, it can be hard to have a frank discussion about your marketing plan.

Although studies show that a sound marketing strategy and an ample budget can only improve your bottom line, the truth is that a lot of marketing can feel immaterial to the small business owner. That doesn’t mean it’s not worth the investment, though.

When you’re setting your marketing budget for the year, there are a few things you should consider. We know that your budget is tight, which is why we want to help you figure out how to balance your checkbook without sacrificing marketing strategy and quality.

To get you started, here are the three key questions you should be asking yourself when trying to determine your marketing budget.

3 Key Tips to Consider When Building Your Marketing Plan

What are my marketing goals?

The truth is, you can’t know how much you need to spend unless you have a clear understanding of why you are spending it. Before you put a number on paper, consider doing an audit of your annual marketing goals. For the purposes of this exercise, these can be vague or they can follow the SMART format. You should consider the costs associated with some common marketing goals, such as:

  • Increasing sales
  • Building brand awareness
  • Launching new products/services
  • Growing market share
  • Entering new markets
  • Targeting new customers
  • Enhancing customer relationships
  • Increasing profits

Is my budget realistic for achieving these marketing goals?

There is a cost associated with each of these goals – and while we are strong believers that good marketing can be done on a budget, it’s important to be upfront with yourself (and your stakeholders) about what it may cost to accomplish everything on your list.

In an ideal world, you’d be able to add zeros to your number in order to arrive at a marketing budget plan that allows you to do everything you’d like to accomplish. Realistically, though, you may need to prioritize your goals and assign an estimated cost to each before proceeding.

How do I know if I am budgeting enough for marketing?

The truth is that there is no right answer here. When in doubt, we recommend that you increase your marketing budget in order to see an increased return on investment. It’s a tough call, but the biggest mistake you can make is to allocate only “left over” funds for marketing after all of your other operational expenses have been covered. Instead, set yourself a definite marketing budget plan early on in the process and do your best to stick to it.

As a rule of thumb, many small businesses will allocate a percentage of their gross revenue for marketing. This is usually between 2% and 3%, though it can be as high as 8% for some startups and may also vary based on the industry that you’re in. If you’re budgeting more than that (or didn’t and then went over), don’t panic. It is common for many small business owners to spend as much as 20% of their gross revenue on marketing during the crucial brand-building stages of business development.

Good marketing doesn’t have to break the bank.

By deeply considering these three questions, you’ll be sure to build a marketing plan that’s sustainable and realistic for your finances. By laying this initial foundation, you will definitely be setting your small business up for long-term success.