Do you have a marketing budget? If not read on for some tips. Creating a marketing budget is one of the best things you can do for your business, and yet business owners avoid them for any of a number of reasons. They maybe unclear how to determine how much to allocate to their marketing. Or they may believe that if they set a budget they will end up spending money because it’s allocated, and not really needed. Alternatively, they may just think that they don’t need one, and are happy to muddle along spending on and ad hoc basis.
When I took a poll on Instagram recently, 57% of people asked for tips on marketing budgets, so I’ve pulled together this “How to “guide to help you out.
Your marketing budget should directly correlate to your marketing plan as part of your overall business strategy.
In brief before you set out your marketing budget you should:
- Set your business goals
- Write your business strategy for the next 12 months
- Scope out your marketing plan
For this “How to…” we’ll assume that you have those things in place, and are ready to set your budget.
Review your marketing spend to date.
Even if you’ve never had a marketing plan, or set a budget, the chances are you’ve been spending on your marketing already. But how much, and on what?
Tot up what you have spent in the last 12 months, including:
- Website development and hosting
- Design and print
- Networking meetings
- Print advertising
- Boosting Facebook posts
- Facebook ads
- “Reciprocal’ work – give this a value
- Freebies and “mates’ rates” to get your name out there and bump up your client numbers – again, give these a value.
All of these tactics could be contributing to marketing your business and getting clients (though that doesn’t mean that they should be, but that’s another story!) Once you have a total for what you’ve spent you may be surprised. Now think what you COULD achieve if you spent that money towards achieving your goals.
Set an overall budget for 12 months
Below are three different ways that you can decide on your overall marketing budget for the next year:
Option 1 – Percentage (%) of Revenue
The simplest way to do this is to allocate between 3-10% of your revenue (or projected revenue for the year).
But, this will depend on the level of your revenue.
For example, if you wanted to run a Facebook ads campaign at £10 a day for a month, you’d be looking a monthly spend of £300. If your revenue if £3000 a month and you’re allocating 10%, that’s your marketing spend for a month, without spending anything else. So you may want to run these campaigns 2-3 times a year, and invest in different forms of marketing in the other months.
This option is best for business that have an established and regular level of income.
Option 2 – Goal Focussed
While you are growing, it may be better to work out your budget according to what you want to achieve on your plan, which may be above 10% of revenue. How fast do you want to grow? If you want quick results you will probably need to invest more at the outset.
To set a budget this way you will need to have written your strategy and marketing plan. Why? Because you’ll know what you want to achieve, the steps you need to take, and now all you need to do is put a figure to those plans.
Option 3 – Set a Fixed Amount
Option Two is great, but what if you just don’t have the funds right now? Be honest about what you can afford, and then build your marketing plan around it.
You’ll be working on your plan and budget in parallel, as your available funds will be influencing the type of activity you can do. You will probably need to build more free activity into your plan, such as reaching you social media goals organically without ads, using free versions of platforms such as MailChimp for your email marketing.
Don’t worry if money is in short supply while you are building your business, there are lots of ways to market on a shoestring.
Whatever you do, don’t make these mistakes:
- Spend what is left over after your other business expenses on marketing.
- Spend ad hoc without a plan
- Don’t track what you spend on your marketing
Whichever option you chose for your overall budget, when it comes to allocating a budget to individual tactics always look for the biggest bang for your buck. When you invest in promoting your business your marketing needs to be working hard for you.
How do you know if it’s worthwhile?
By measuring what you’re doing. Choose activities that you can easily measure. Digital marketing is simple to measure, and the insights you get will help your future planning.
Don’t be tempted to try lots of activities at once, as you need to be able to tell what is working and what isn’t.
If you are serious about growing your business, set yourself a marketing budget.
For more tips like this come and join me in my free Facebook group, The Wellness Business Owners’ Club, where you’ll get resources, tips and training and you can ask me all about marketing.
And yes, I do know that setting a marketing budget sounds deadly serious, but if you want to grow shouldn’t you be taking your business seriously? I’ve been in marketing for over 20 years, and the businesses that thrive are those with clear goals, a strategy and a marketing plan and budget focussed on making those goals happen.
I want that for your business, I hope you do too.