One of the most overlooked components of a small business budget for a given year is often the marketing spend – especially in a time of recession. A common school of thought is that marketing should be the first thing to go, but in reality you must adhere to the old adage “you must spend money to make money.”
Your marketing budget should be looked at as an investment in your company, not an expense. Creating a marketing budget is important as it serves as a guide to ensure that you are staying on target with estimated costs vs. the actual costs, preventing the risk of overspending.
Clients often ask how much they should allot for marketing while finalizing their budget for the coming fiscal year. A common guideline to follow is allocating 2-10% of your annual sales, though this amount will vary based on factors such as the type of industry your company is in and whether your business is new or established.
A more few tips to help you get started are:
- Develop a marketing plan. One of the best ways to determine your budget is to draft a marketing plan for the next year based on the needs of your business. Are you positioned correctly in your industry? Are there areas of your business you would like to grow? Answering questions such as these will help ensure your marketing dollars align with your company goals.
- Don’t commit your budget to just one or two activities. Test different strategies to see how you can best reach your target audience. In addition, utilizing multiple techniques can help you reach a wider audience. Determine what works best for YOU.
- If something is working, stick to it. Many companies make the mistake of ditching a technique that is working for them as they get bored with it. You can always test new messages or a fresh creative without altogether abandoning a proven tactic. If it’s not broken, why fix it?
- Remember the 6:1 rule—it takes six times as many dollars to bring in a new customer as it takes to retain a current customer. Don’t forget to invest in campaigns or initiatives for current customers. Allocate your budget accordingly.
With a little creativity and planning, you can turn a few dollars into a lot of exposure for your company. If you would like more information about preparing an efficient SMB marketing budget, contact us with your questions: firstname.lastname@example.org