Any business, large, medium or small, needs a marketing budget; without one a company will soon find itself reacting to marketing opportunities by ill thought out and overpriced advertising campaigns.
It is essential that a business invests in a marketing budget, however, like any investment, there will always be an element of risk, so this post gives you 8 steps for creating a small business marketing budget.
1. Identify the Needs of Your Budget
The main purpose of a marketing budget is to keep track of the money and to ensure you spend your money wisely. To make this easy, it is essential you define your marketing goals and priorities. However, it also important you do not set your budget so high that it starves other parts of your business of cash.
Make sure your budget takes in all the cost that will be required in your campaign. Design, copywriting and printing your leaflets must be included in your budget as well as the distribution costs; if you ignore any of these expenses when preparing, your budget will be severely compromised.
2. Identify Your Target Audience
It is important you correctly identify your target audience. This is essential when preparing your budget; it will help you define your priorities and will tell you what campaigns are effective to different target audiences.
3. Do Not Ignore Other Channels
Although your budget will concentrate on leaflet distribution, do not forget to include the cost of a website.
It is essential for all businesses, large or small, to have an internet presence. One of the CTA’s (call to actions) on your leaflet should be an invitation to visit your web page. So if you do not have one, we advise you to get one and add the cost into your marketing budget.
4. Plan Annually
It will be easier to plan and control your marketing budget if you can prepare for a year ahead.
Many businesses can identify peak times during the year when their companies will profit. Holidays such as Easter and Christmas, Valentine’s Day and others and these can be allowed for in your budget; however it may be prudent to add some extra cash to take advantage of any unexpected opportunities that may arise.
Do as much research as you can on what may be happening over the next year in your market. In this way, you will be able to allow for opportunities that will arise and include them in your budget. If you take advantage of a chance without budgeting for it, it will cost you more money.
6. Base Your Marketing on your ROI
Any advertising undertaken by any business should be considered for its ROI (Return on investment). This means taking a good look at your marketing goals and what distribution campaigns have worked for you in the past; were they professionally designed, were they A5 or A4, which areas did you cover and what results did they deliver. You can then budget for the one you believe will deliver the best return on your investment.
Once you’ve found something that works, you can increase your budget safe in the knowledge that it is going to perform well.
7. Set an Annual Spend
Many small businesses use what they call a “flexible” budget which they adjust at varying intervals according to the cash they have in the bank, market trends or if a particular campaign has performed well. Some businesses use a “bucket” system dipping into their cash flow when an opportunity arises. Neither of these is a good way to run a marketing budget.
Depending on how long you have been in business, you should be spending between 6% and 20% of your total budget on marketing. The amount you can allocate to your budget will depend on how much you have spent on marketing in the past; this will help you set your total marketing budget.
8. Set a Monthly Spend
You should align your budget to tie into your monthly spending requirements. The reason for this is you may need to spend more on marketing in some months than you will in others. For example, companies selling gardening services will need to market more during the growing months than in the depth of winter months.
Some businesses who have identified slow months in their sales cycle will want to budget for special promotions in these slack times.
Start Defining Your Small Business Marketing Budget Today!
Now that you know these 8 steps for creating a small business marketing budget you can start to plan for the year ahead.
- Review your current budget defining process. Compare your current budget to the steps outlined above to determine if there are steps you’ve ignored or haven’t given appropriate attention.
- Ensure your budget realistically accounts for ROI so your revenue is improved by your marketing.
- Ensure you have a process in place to track whether your marketing is working.
- Ensure you have a process in place for handling unexpected costs.
By using these 8 steps for creating a small business marketing budget you can be sure that you will hit the ground running when advertising your business.