Creating a marketing budget for your small business used to involve a lot of guesswork. Flinging spaghetti at the wall and seeing what stuck was the norm. This trial and error approach is both expensive and ineffective. Show
Now, small business owners are learning how to use the many tools they have for creating a successful marketing budget. But the number of resources, steps, and examples available to them can make things confusing. What if I don’t have enough money? What if the money I do have gets wasted on something ineffective? We’ve done the research and interviewed a real-life small business owner to help answer these exact questions. Why Do I Need a Marketing Budget for My Small Business?For those who cringe at the idea of spending money on marketing, we get it. Wading through dozens of marketing options can feel overwhelming when you already have so many additional business expenses to consider. We spoke with Matt Jayson, owner of Matt’s Mutts, a premier dog walking company in Los Angeles, CA. When we asked him about spending money on and creating a marketing budget for your small business he said, “Paying a small fee to obtain a client that could use your services for life is always a worthy investment.”
Allocating funds for a marketing plan may seem confusing, but it’s essential for career longevity. Below are the 6 steps you need to understand and create a successful marketing budget for your small business. Step 1: Look at the Big PictureA marketing budget is essential for your small business at any stage. However, knowing where you are on your small business journey can help you make important decisions. Essentially, there are two obvious categories your business can fall under — start-up or running. Your current start-up or expert status will impact how much you’ll need for the marketing budget for your small business. In general, expect to spend more when you’re in the start-up phase than once you’re up and running. For example, Matt’s biggest expense occurred in the start-up phase. He noticed that in LA’s competitive dog walking scene, a good logo is key for getting clients in the door. Therefore, he spent most of his initial budget on his logo in order to solidify brand identity. “I hired a cartoonist to bring my ideas to life and I didn’t skimp,” he said.
Step 2: Outline Your Sales FunnelA sales funnel is a series of steps your potential customer has to take in order to purchase your product or service. Outlining your sales funnel will help you understand:
If you’re up and running, map out each possible sales funnel that current clients take to purchase from you. Notice which sales and marketing tactics are working. How much do you currently spend on these tactics? Where can you trim the fat?
Step 3: List Your Operational CostsCompared to our other tactics to help you set a marketing budget for your small business, this step is even more straightforward. Create a spreadsheet or template with all your current or anticipated operational costs. Costs may include web hosting, sales tax, professional fees, content outsourcing fees and whatever else you need to run your business. These calculated business essentials paint a realistic picture of what you have to work with regarding your marketing budget.
Step 4: Set GoalsNow you know what phase your business is in, your current or future sales funnels, and how much it costs to run your company. It’s time to set goals. Answer these questions to determine how your marketing budget and goals work together:
Now that you know your goals, you’ll need a system for tracking your progress. Matt says, “If I’m going to spend anything I have to think of my ROI and it’s usually high.” A great way to figure out the best marketing tactics for high ROI is to research your competitors.
Step 5: Scope Out the CompetitionWhen it comes to setting a marketing budget for your small business, understanding your niche is of the utmost importance. Keep track of your top competitors and study their marketing campaigns.
Next, outline what they share in common.
Matt observed that his competitors typically used flyers, social proof, and printed materials to market their businesses. Once he tested these methods, he was able to narrow down what worked best for his unique company. “I find that going to dog parks and coffee shops and handing out business cards is more effective than taking out ads in papers,” says Matt.
Step 6: Create Your Marketing PlanNow for the fun part, actually creating your marketing plan. By this point, you should have a firm understanding of where your business is and where it can go. Use the information from the above steps to outline:
Once the plan is fully fleshed out, setting a marketing budget for your small business will be easy.
Marketing Doesn’t Have to be ExpensiveRegardless of whether you’re just starting out or not, creating a marketing budget for your small business doesn’t have to feel overwhelming. And a tight budget shouldn’t stop you either! Get specific about your marketing plan and feel more confident about where your money is going. When you’re learning how to set a marketing budget for your small business, all that knowledge can be used for years to come. It is, of course, challenging to run your daily business operations and your marketing at the same time. That’s when the leadership tactic of delegation becomes important. OutboundEngine provides the expertise of a full marketing team for your business without the need to hire more staff. Learn more about how marketing automation can help your small business. What is included in promotional budget?Promotional budgets usually include money put toward advertising across mediums such as radio, television, Internet, and print. A company's promotional budget can include expenses for email campaigns, social media outreach, and outdoor signage.
What is the most effective way to create a promotional budget?Past Sales Data
If you've been in business for at least a year, one of the simplest methods of creating your budget involves reviewing your past year's sales. Tally up the total amount of sales your business made in the past 12 months. Then decide what amount to use to promote your business during the next year.
What are the four methods used to create a promotional budget?The most important and used promotion budget methods are: percent method from incomes, the method based on the existing resources, the competitive alignment method, the method based on objectives and promotional activities and the method using marketing research.
What are the 5 steps to set an advertising budget?How to allocate your marketing budget. Set marketing goals. Setting your marketing goals is a crucial part of creating a marketing budget plan. ... . Create a plan for the year. ... . Calculate expected costs and return on investment (ROI) ... . Allocate your spending. ... . Track your campaigns and refine your strategy.. |