So you are looking into scaling up your business, to make your brand known and get more customers. However, you are scared to spend so much on marketing and get so little out of it. Given the common phrase, “you have to spend money to make money”, you know you have to give marketing a try. Do you know you can spend a considerably inexpensive amount but still attain your marketing goals? A marketing budget is the solution you need, so how should you rock it? Let’s begin;
What is a Marketing Budget
WebFX defines a marketing budget as a document that explains the total amount of money a business intends to spend on marketing for a given time period. The time estimate could vary, be it a month, a quarter of a year, or a year. Essentially, it is a marketing effort that is promotion-related. For instance, you may allocate funds towards social media promotions, content creation for content marketing, website design & development, marketing tools, hiring employees, traditional campaigns such as print media or T.V, and email marketing campaigns.
To attain a functional marketing budget, you need to have a comprehensive marketing strategy and a firm market plan. Your market strategy and plan will depend on the size and complexity of your business. If your business is small, you will need to hire a few professionals to work on creating content for campaigns on the different platforms. On the other hand, large firms have numerous departments with specific goals attached to the growth of the entire business. In this case, a lot of planning is done on attaining the best strategies for each department, but in sync with the broader business targets.
Why Your Business Should Have a Marketing Budget
The fear of knowing your business’s financial status might make you shy away from budgeting. Taking the “ignorance is bliss approach” to evade a revelation of your business status will limit your business growth. So, here is why you should have a marketing budget:
- Track your financial moves. When marketing a business, you’ll need specific strategies to be effective. With a marketing budget, you’ll likely cut unnecessary spending.
- Effective distribution of funds. A marketing strategy will help you spend in the right places in marketing. The affordability of specific marketing strategies is highly dependent on how much you’re spending.
- Create a benchmark and set of goals. A marketing budget will help you set goals to measure your performance and create accountability. With a benchmark and realistic goals, you can identify outcomes of different market channels. Having a clear expectation will give you a clear picture of what you should earn. You’ll realize meaning in your hard work.
- Long-term planning. When you have a whole year’s marketing budget, you’ll be confident to plan for the long term. Well, this idea helps you to have enough finances for your marketing campaigns. Therefore, you’ll be sure to have consistency in your marketing with no additional spending.
- Business growth. Do not equate marketing to other costs. With Marketing budgets, business departments are organized resulting in business growth. Besides, marketing is an investment, strategic marketing will help you grow your business and get quality returns from your investment.
How to Make a Marketing Budget
Budgets are complex, for this reason, most people shy away from the idea of budgeting for marketing costs. Having to get through different marketing options and getting the best out of it amid other responsibilities is tough. But here are some simple steps to guide you when planning for your marketing budget:
- Set up a baseline. From the words of entrepreneur Dave Lavinsky, “the first step to a solid marketing is to get organized about your current financial situation.” Having a baseline on estimates makes it easy to create an efficient marketing budget. To set up a baseline, you need to know the minimum amount of cash you’re receiving monthly.
- Save the appropriate amount. While the amount spent on marketing depends on various factors, most companies calculate an approximate percentage of 2 to 5% of gross revenue for marketing. Find what works best for you because marketing in businesses differs, for example a startup’s budget varies greatly from a fully established business.
- Identify funding options. If you have been in business for long, you’ll relate with the phrase, “you need money to make money.” Identify a secure way of accessing funds for marketing in case you need extra funding. Find flexible loans and save an amount for emergencies.
- Keep a constant analysis and adjustment. The marketing industry can be challenging, keep an analysis of the performance of the strategies in use. Also, keep adjusting your budget funds when there is an imbalance.
We all like to be successful in our businesses, but budgeting is nothing short of a headache. As you enjoy working on different aspects of your business, remember that having a marketing budget will ease your work. With an efficient marketing budget for your business, your priorities will be right and your targets easily achieved.