Success in business requires a constant effort in marketing your products, services, and more.
At Problem Solvers, we often see small businesses that don’t have a marketing budget (or don’t know how to create one). We also encounter small businesses unsure of how to spend their marketing budget: sometimes underspending on customer-facing efforts, while overspending trying to reach their target audience.
The best place to start a marketing budget is to develop a comprehensive marketing strategy. You want to be able to measure the results of every dollar you budget. Your marketing budget is intertwined within your marketing strategy, and we can help you set goals, determine how and when you can reach those goals, all within your budget.
Other considerations of your marketing plan should include a deep understanding of your target market, your competition, and a strategy that makes you stand out from the competition. These considerations help you form an idea of your needs, and what you should budget for.
5 Steps to Creating Your Marketing Budget:
Step 1. Look at the big picture. Every business needs a marketing budget, whether it’s a startup or an established business. Your business objectives, status, and goals determine the amount you’ll need to set aside per quarter and year. In general, a startup business has more marketing needs than a business that has been around for much longer, so more money should be budgeted for startup marketing. Sometimes it can be a struggle to find the necessary funds, though, so prioritize your spending and use your money wisely with strategies that will make you more competitive in marketing sooner than later.
Step 2. 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 seek before they buy
- Factors that influence their final decision
- Any interaction after they leave your website or become a customer
Anticipating a customer’s needs along the sales journey impacts your marketing plan and helps you determine the best ways to invest your money.
Step 3. Gauge operational costs. The first thing to do when deciding a budget amount is to outline marketing operational costs, or the costs you know you’ll need to pay for right away. This could mean website design and development if you’re a startup or a smaller budget for web updates and hosting if you already have a website. 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 and can include details like what it might cost to produce a TV commercial, or how much you should spend per month on Google AdWords.
Our focus is on 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 covers creating or updating website content, running digital ads, researching keywords, generating blog posts, and more.
Step 4. Set goals within your budget. Three goal-setting questions to ask yourself are…
- 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 selected timeline.
Step 5. Create and execute a marketing plan.
After completing steps 1-4, you’re ready to finalize your budget and execute your final marketing plan! This is the exciting part! You already know the basic tools you need to get started and understand how, when, and where to reach your target market. You need a budget to execute a marketing plan, and at this point, you’ve done that.
If you’re just starting a small business and creating a marketing budget, Problem Solvers can take a look at your business model to help you create your marketing plan and get you the results you deserve.
Digital marketing efforts are constantly changing, evolving, and growing, so let Problem Solvers help you evolve if you have an established business. We can help you spend your budget wisely, so you spend less to convert more than ever before!
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