“It’s time to look at marketing as an investment, not an expense”
Many businesses look at marketing as a “nice to have” activity or an optional extra so they don’t allocate it an appropriate budget.
If you are taking time to do any activity in business it should be well considered and executed to the best of your ability as it will show your customers (and potential customers) how you conduct your business, so not preparing an adequate budget can make you look unprepared, disinterested or disorganised.
How much should I budget for?
As a standard rule you should be looking to allocate between 5-8% of your revenue to your marketing efforts.
This will include:
Brand development costs, including all the channels you use to promote your brand:
Sales collateral & marketing tools
On and offline advertising
What to budget for?
You want your budget to comfortable cover all of your marketing activity costs, with some flexibility to allow for any unexpected expenses that occur
As we have already looked at our customer profile and decided upon our marketing channels we will be better prepared to look at the costs involved, don’t forget to look at all of the costs involved as this could add up rapidly.
Eg, If you have decided to exhibit at a trade show you will need to know the exhibitors fee, plus additional costs like extra staffing (either to allow for the lack of your presence at work or to represent you at the trade show), promotional dressing for your stand, merchandise you will be taking with you; literature, business cards, catalogues or giveaways and travel & accommodation. If you are unsure you could attend as a delegate for the first show to get an idea of what is involved.
There are many companies out there that want your to buy from them and most will not care whether the money spent will be of benefit to your business. By knowing your budget and having the solid foundations of knowing that is based on your audience and market research you can prevent costly mistakes like being swayed by the next big thing or “everyone is doing X so you need to be doing X”
Having a budget in place also gives you clear indications of what you can afford if genuine opportunities present themselves.
Embrace free activity where possible, free trials or events are worth checking out so you can review whether that activity is worthwhile for you.
“no cost” Channels ie, social media pages or email marketing have upgrade options so it’s worthwhile budgeting for the possibility of additional costs in case they occur.
There are lots of events that you can attend for free or as a guest, but be aware that you may need to budget for coffee’s/meals/travel etc.
Consider the cost of your time spent on activities. It may be time taken away from your day to day tasks.
Give yourself flexibility to allow for unforeseen costs.
Your marketing is representative of your company, If you don’t know how to do something, paying for a professional service or training will be of far more benefit than trying to work it all out yourself.
Review each activity and be honest about its success, if it doesn’t produce an adequate return on investment, you budget may be better spent elsewhere.