When it comes to running a successful marketing campaign, or indeed, a thriving business, planning is key. In fact, whether you’re a small business or a multinational corporation, planning should be one of the most important parts of your business. After all, success doesn’t just happen; it’s planned for.
Being in business is about making money. While many other factors come into play, at the end of the day, the dollar rules. That’s why it’s important to make sure that every single dollar your business makes is being put to good use. All dollars should be accounted for and planned with. If you are researching new marketing strategies for your business, it’s key that you always keep your finances in mind. The best way to guarantee you accomplish your marketing goals is to set a marketing budget. Your marketing budget can be big, small, or almost nonexistent—the most important thing is that it exists.
Why You Need a Marketing Budget
All good business owners understand the importance of budgets. Budgets keep you from spending your profits, buying unnecessary items or making unnecessary investments, and help you manage your resources. In short, they keep your business afloat. While you may acknowledge why budgets are helpful, you may not yet have a dedicated budget specifically for marketing, nor may you see why you need one.
Why should businesses have a marketing budget?
Marketing is vital for any business, because marketing helps businesses grow. Without promoting your business, your business can remain stagnant. If you want more clients, greater revenue, and ultimately more profit, you need smart, effective marketing efforts.Those marketing efforts cannot be “smart” unless they’re carefully financed—hence, a marketing budget. A marketing plan paired with a matching budget will help you reap success. The results are well worth the effort.
Related: 6 Sample Marketing Plans
Creating a Marketing Budget
Creating a marketing budget takes some careful consideration and planning, but it need not be difficult or stressful. Spend a few hours with your staff or marketing people to come up with a budget moving forward. The average marketing budget should have multiple timelines based on your marketing plan goals and objectives—that is, for maximum impact, you should include not only a yearly budget, but what you will spend monthly, weekly, or on a certain campaign.
Here are things to keep in mind:
- Organize your financial information. The first step in creating a marketing budget is to organize all your finances. You need to know what you’re working with before you can budget. Gather all your revenue information and business budget details together in one place before you begin. When budgeting, you should base your calculations off of “reliable revenue”—the minimum amount of money your company makes each month.
- Decide what tools you are using. The purpose of a marketing budget is allocating funds among the many marketing techniques or strategies available. Which techniques will you be using? You can choose from traditional options such as print, radio/TV, yellow pages, direct mail, or trade show booths, or modern resources such as social media, email marketing, and reaching out to influencers.
Your options are wide and varied, providing ample opportunities even to smaller businesses with tight budgets. While the sky’s the limit, try to keep your marketing efforts realistic. You can’t be everywhere all at once.
Marketing Budget Allocation
Decide on your marketing budget allocation. The typical marketing budget allocates 1 to 10 percent of sales to marketing per year. Of course, your marketing budget percentage may be less or more, depending on your business and your resources.
Related: Marketing Without a Budget
If you are just starting out, you should try to spend as much money as you can affordable sustain, even up to 15 percent. This is because you are new to the market and relatively unknown. Once you become more established and have regular clients and a steady stream of revenue, you can shave the budget a bit.
No Money? No Problem!
Don’t worry if you don’t have money to dedicate to marketing. As long as you have the time to delegate, there are many opportunities for you. In fact, there are many highly effective marketing activities that can be done to promote your business without money.
Here are some quick and dirty tips:
- Utilize social media. The major social media networks, from Facebook to Twitter, are free to use. You don’t have to put a hole in your wallet by investing in paid advertisement. If you’re interesting, witty, and post good content, you’ll quickly gain a following. And don’t forget to use hashtags to improve your reach on social media.
- Blog. Publishing content that relates to your business is absolutely free. All you have to do is invest your time in writing good blog posts. Brainstorm topics relevant to your industry that you, if you were a consumer, would want to read. Put passion into writing articles, and be sure to publish them across as many platforms as you can. You can link to your articles from your social media channels. These articles will be read, shared, and will generate traffic to your website—and you don’t have to spend a dime!
- Use SEO strategies. SEO stands for “search engine optimization.” While you can pay thousands of dollars for an SEO expert, you can also optimize your website for search engine rankings on your own. All it takes is some time, and patience to teach yourself the basics of SEO. Conduct keyword research and try to weave those keywords into your website pages and into any articles you write.
Putting it all together
Look at example marketing budgets to help you draft your first sample marketing budget. If you have any marketing staff, you should utilize them to help you make the budget. Now, while it is important that your budget is followed—that is, you should not spend more than you can afford—you shouldn’t feel that it is set in stone. As you embark on your various marketing campaigns, you may find that one campaign or source is much more beneficial than another. You should put money where the money is. Finance what’s getting results and nix what is not.