Growing a successful business involves constantly marketing your products, services and more.
One common mistake we see, is that a lot of small businesses either don’t have a marketing budget (or don’t know how to create one), are unsure where to spend their budget, and sometimes underspend on customer-facing efforts, while overspending trying to reach their target audience.
Whether your marketing budget is large or small, the best way to start one is to develop a comprehensive marketing strategy and a solid marketing plan. This will help you measure results and determine where your funds should be spent.
Your marketing budget is a large part of the plan, and we can help you strategize where to spend your budget, set goals, determine how to reach those goals and set up a timeline to do so.
A detailed marketing plan should include details and a deep understanding of your target market (who you are trying to reach), your competitive position in the market, and a strategy that makes you stand out from the competition.
Here is our 5-step plan to creating a marketing budget for small businesses…
Step 1. Look at the overall picture. A marketing budget is essential for any business—startup or running. Your business objectives, status and goals will impact how much you’ll need to set aside per quarter and year, but in general you should expect to spend more when you’re in the start-up phase than once you’ve been in business for 10 years. When you’re deciding where to pull money for a budget, prioritize your spending and focus on putting money into places that will make you more competitive in the marketing sooner than later.
Step 2. Outline and understand your sales funnel. A sales funnel is the process or steps a potential customer takes in order to purchase a product or service from you. When you outline your sales funnel, you will determine:
- How clients find you (online, social media, online ads, etc.)
- What information they look for before they buy
- Factors that play into their final decision
- What the interaction is with them after they leave your website or become a customer
Knowing what a customer needs along the sales journey will impact your marketing plan and help you determine where invest your money.
Step 3. Write down your operational costs. The first thing to do when deciding a budget amount is to outline marketing operational costs, or things you know you’ll need to pay for upfront. This could mean website design and development if you’re a start-up, or a smaller budget for web updates and hosting if you already have a website online. Some things you may also want to consider including in your plan include:
- Web hosting fees
- Professional fees (if you’re going to hire freelancers or an agency to help)
- A contingency budget (an emergency budget in case something comes up like a print ad or editorial you want to run, a last-minute online ad campaign, etc.)
- Photography/videography budget (if you need to update new photos on your website, or take photos/videos for ads)
Most agencies can estimate and develop a marketing plan for you, down to the details of what it will cost to produce a TV commercial, to how much you should spend per month on Google AdWords.
Our focus is in digital marketing, so we can outline all of your digital marketing needs and dollars, so you’ll know where and how to best spend your digital marketing budget. A digital marketing plan will cover things like creating or updating website content, digital ads, keyword research, blog posts and more.
Step 4. Set goals. There are three questions to ask yourself that will help determine your marketing budget and goals…
- How much revenue do you need?
- How many sales do you need to hit your revenue goal?
- What is your conversion rate, or what percentage of leads usually convert?
Set conversion goals in mind depending on your budget and timeline.
Step 5. Create and execute a marketing plan.
If you’ve done steps 1-4, you’re ready to create and execute a final marketing plan! This is the exciting part, where you’ll know the basic tools you need to get started and understand how, when and where to reach your target market. You can’t execute a marketing plan without a budget in place and following the steps above will allow you to do that.
Whether you’re just starting a small business and creating a marketing budget, or you’ve had one you’ve used for years, we can take a look at your business model to help you create or improve your marketing plan to get you the results you deserve.
Digital marketing efforts are constantly changing, evolving and growing, so let us help you spend your budget wisely, so you are spending less to convert more than ever before!
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