Any business owner who needs to advertise, promote, and/or sell his or her products and services would know that a marketing plan is crucial to generate clients and close sales (which actually are the testaments of a successful business!!). Whether you have a small or large-sized business, you need to have an effective marketing plan that should strictly meet your marketing budget. Your marketing plans will not prosper if your budget can’t suffice its demands. This is the reason behind why business owners have the difficulty to give a budget for their marketing plan when asked. It is either- they don’t know the real cost of marketing or they just “think” they don’t have the budget for it.
I should remind you that there is no exact “standard” or strict “formula” that needs to be followed when creating a marketing budget. Relying on a formula (believe it or not, there are businesses who do) will rarely be the best tactic. Some business owners will pattern their marketing plans and budgets to others who have succeeded in marketing their own business and conquering their specific niche in the consumer world. This should not be the case!!! Marketing budget and cost will vary widely from one business to another since both will greatly depend on the chosen marketing strategies and target market (this is the marketplace slice you are aiming to market your business).
Working on your marketing budget can become quite expensive (especially when you don’t know how to make the most out of it) and time-consuming. Carole Mahoney, in her post Small Business Budgets For Internet Marketing, stressed that an internet marketing budget should be centered on two significant factors- time and money. Actually, any marketing budget should give significance to both factors. You need the money to employ marketing tools and services, as well as the time to use these to accomplish your marketing goals.
Marketing your business needs time investment and cash outflows. In this competitive world of business, it is best for businesses to double time and ramp up their spending to get a head amongst the others. Yet, the uncertain economic status today will, on the contrary, cause businesses to cut back and wait for things to stabilize. This will make it more important that a marketing budget should be smart and realistic.
Why Make A Marketing Budget?
Creating and using a marketing budget have several advantages. Your marketing budget can control your expenses and foresee your profits. It will also help you to organize and coordinate your marketing plan or strategies within your business.
When you make a well-designed marketing budget (it must be blatantly rational and clever), it can be your own standard to the performance of all your business actions. It can communicate to others (if you have a staff) who are tasked to implement marketing strategies. It should be your personal tool to keep you focused and notify you when there is something to modify in your marketing plan (when there is something that goes really right or very bad!!)
How To Build Your Marketing Budget?
When building your marketing budget, you need to see and think of it as an educated guessing process. It is based on common sense and rational estimate. Coming up with the number or amount you are comfortable spending is just part of the budgeting process. While creating your marketing budget, you need to also dig deeper on where your dollars are best spent (this is the part where you need to be realistic in your marketing budget). There are certain marketing strategies that need more of your time and money to boost your sales and enhance your marketing plan while there are others that you don’t really need (well of course, you can still use them until you deem them as necessary).
Before any marketing budget can be created, you need to make certain that your marketing plan is in place. Consider your marketing objectives as these will be your business goals. Your objectives will also be your guide where you want your marketing strategies to take you or what you want your marketing tactics to accomplish. Without a target goal or aim, there is no sense in discussing how much it will cost to achieve what is actually not even defined. The time and energy you spent on making your marketing plan will pay for itself if it focuses your time and money (marketing budget) on programs and strategies that will best benefit your business.
With your objectives, set an annual budget that you want to spend. You need to consider several factors when you are establishing the amount you will spend on marketing in a year. Your annual marketing budget will depend on how established your business is, what industry you are in, and (most importantly) how much you can really afford. If you are still in the first few years of your business, it is wise to invest much on marketing. However, you need not spend yourself into a hole since you can make use of affordable and effective web marketing strategies and options to help you promote your business. Now, if you become established and profitable, you can drop down your annual marketing budget. You must not forget to also consider related expenses (these will include market research, trainings, or hiring experts for professional web development and design).
Once you have your annual marketing amount, you need to allocate your budget to the marketing channels that are available for you. You can opt for Print, Radio/TV, Direct Mail, Trade show booths, and the most accessible and common these days, The Internet. Web marketing is mostly used by businesses not only because it is the most accessible, but it can provide you limitless possibilities in reaching your target market. Most marketing essentials today will include your website and social networking sites (like Facebook, Twitter, LinkedIn). The great thing in investing in a well-design and well-develop website is that your potential customers can find and reach you. You can have their attention and they will know what you can offer to them. Therefore, it is wise to invest time and money in improving your web content and making yourself unique from the crowd. You can definitely hire the services of a web design and development firm or company to help you on your website.
Compare your marketing actual to your budget. It is a way for you to become better in establishing your marketing budget. It will also allow you to pinpoint areas that need accuracy and improvement. If you see that some of the activities you have outlined cost more than you allocated amount, you need to find other alternatives or otherwise find more funds.
Regardless on how you allocate your budget to your marketing plan and strategies, it is vital to follow that your marketing efforts closely and meticulously. Treat every dollar precious. Don’t spend on something that you know won’t yield any benefit to your marketing effort.
