Let’s admit it. The creation of a budget for marketing for a small-sized business is typically not an important thing to do. In most cases, we don’t have enough cash to justify having an official budget for marketing. Sometimes, we just don’t bother with one because it’s too painful. If you don’t have funds to invest in an advertising budget, what’s the purpose of having one?
Why bother? The answer is easy. If you don’t have an annual marketing budget, the most likely you’re reacting when it comes to marketing instead of being proactive. This means that you might be making decisions about what you invest your marketing dollars at the moment versus—an ongoing, strategic plan throughout the course of.
Don’t get too hard for yourself when this is the case. The reason you’re not doing it is the belief that you don’t have the funds to pursue the goals you’d want to do in your marketing.
That’s why in this particular exercise, I’d like to encourage you to adopt a philosophy I came across more than 20 years back. It was where I had to determine the things I was looking to accomplish in my life. A thought leader of the time spoke about getting your limitations out of the image so that you could clearly discern what you’d like to achieve. He suggested that in order to get out the financial limitations by pretending to have an enormous amount of money. This way, you can concentrate on your aspirations and goals instead of being limited to financial limitations.
It’s this simple task that I’d like you to consider applying to your marketing budget right now.
In doing this, I believe you’ll be able to reap three benefits majorly:
The time has come to formalize the marketing budget of your business.
You’ll know the things you would like to accomplish through your marketing.
You’ll be more proactive in your marketing rather than reacting.
Allocating Your $100,000 Budget
For us to begin our work, the first thing to do is determine where you’d like to put your 100,000 (feel free to alter the number larger if it makes sense) budget. Below are the key elements that should form included in any effective marketing plan. Take a look at the following elements, and you are free to alter the system and then apply the $100,000 in a way that makes sense for your company over the next few years.
Marketing Strategy
Campaign Development
Content Creation
Graphic Design
Landing Pages
Follow Up Steps
Measurement
Promotional Channels
Advertising
Promotions
PR
Writing
Speaking
Referral Strategies
Audience Engagement
Social Media
Engagement
Blogging
Email Marketing
Website Updates
Credibility Elements
Reviews, Testimonials, Case Studies
Award Submissions
eBooks & Books
Selling Tools
Proposal Development
Product/Service Packaging
Cross-Selling/Upselling Promotions
eCommerce
Making Sense of the Numbers
Then, I’d like you to be aware of the places you have weighted your money. These areas with a high weighting probably are more important to you. Therefore, take note of them.
Then, you should note where you have allocated the most funds. It makes sense that these areas have the lowest importance, or you believe that you are able to tackle these areas by yourself at a low or no expense.
Then, you can remove the areas in which you’ve not allocated any funds because they are either not applicable or aren’t priorities in the coming year.
What’s Your REAL Number?
You should now know what you’d do with your money should you have a budget. Let’s now break our marketing budget and turn it into the actual. For starters, I’d like you to figure out the amount you believe you are able to afford within the calendar year. If you’re struggling to figure out the exact amount, here are some realistic (vs. hypothetical) methods to estimate the budget for your advertising.
The easiest way to do this is to calculate a number of your net profits or net sales that you think is feasible to invest toward marketing.
Another way to approach it is to examine your spending the previous year on your marketing and decide whether or not you are able to manage to pay the same amount or maybe slightly more.
Another option is to consider the sales you make each month and then assign an amount that you believe is feasible to handle from each month, recognizing that certain months are busier than others throughout the year.
The process of establishing a budget for your small business generally requires some sacrifice. This could be due to removing the popular “daily latte,” skimming off other expenses, as well as reducing your income or taking out loans. Make sure that your sacrifice won’t cause you to be unable to sleep at the time of night!
Be aware it is similar to investing in the stock of a company. The difference is that you’ll know the details of this business.
Defining Your Real Budget
Now you’ve got your numbers. I’d like to go back to look over your budget. Let’s say that your annual budget is $10,000, versus $100,000. Do you think it is possible to reduce each figure down to 10%? Or is one already way over the top? Do the areas you identified as crucial are still being weighed more heavily? Are you able to reduce the least significant areas to increase the budget for other areas?
When you reorganized your budget, you may have discovered areas you could do by yourself in order to cut costs. Make sure that you don’t put too many tasks on your plate that it’s impossible you’re able the entire process without risking other parts in your company.
Review your new to-do list. Then, prioritize it according to the importance and also by the level of your expertise. If they’re not important and you’re not skilled in them, could they be put on hold until now?
There is a chance that you have to cut certain things out of your marketing budget at the moment. Keep your own “parking lot” budget document and revisit it whenever you are able to spend. It can give you fresh ways to do things and also a number for your budget to aim for.
Take a look at the work you’ve done! Do you feel that you have a clear understanding of what direction you’d like to take in your marketing? Do you feel you’ve come up with an affordable, real-time marketing budget? Are you excited to try something new in your marketing?
A formal budget for marketing provides you with a reliable way to gauge the success of your marketing. It can help you expand your business as well as provide solid advice on how to concentrate your marketing.
