What Is A Good Marketing Budget For A Small Business
What is the ideal marketing budget for a small business? This article will discuss how many resources should be allocated toward marketing for your small business.
It will also discuss how you can know when you’ve reached your ideal budget.
When working with a marketing budget, there are several things to consider. It’s all about building a good plan that works for your business.
Marketing is not a one size fits all approach. Every small business has its own approach, strengths, and challenges.
It’s also vital to factor in other expenses, such as recruiting and hiring new employees and maintaining or purchasing office equipment.
How many marketing resources should you have?
As with most things, a good rule of thumb is that there is no “one size fits all” approach.
With that said, it’s a good idea to be aware of your resources to set an ideal marketing budget.
Before we look at those things, it’s important to understand what a marketing budget is.
For the sake of this discussion, I’m going to assume that your small business operates on a lean budget.
A marketing budget is how you allocate resources toward marketing. It’s the equivalent of putting aside a certain amount of money for marketing.
It’s also an estimate of how much you can spend on marketing. It’s what you decide to spend on marketing in a given month.
Before we look at each of the different components of the marketing budget, let’s first understand how you set one.
How to set up a marketing budget
In the past, marketing was a very haphazard process. You would spend an amount of money to get the business up and running.
Marketing wasn’t a consistent process. As such, it’s a good idea to set up a marketing budget and a marketing calendar to build your marketing efforts into a plan that can help you grow your business.
Instead of trying to manage all of your marketing activities at once, create a plan that fits your needs and resources. It’s easier to do this for a more limited budget.
A marketing calendar can help you determine your goals and then develop a plan to achieve them. It is usually created by a marketing manager at a marketing firm.
It usually takes the form of a simple spreadsheet. It looks something like this.
Each month, a marketing manager adds a column of objectives (such as; drive new customers, acquire more customers, increase brand awareness, etc.). Each week, a marketing manager adds the goals (such as; generate sales, promote content, etc.).
Each day, a marketing manager adds the objectives (such as; build relations, meet with customers, etc.).
You can use a monthly budget to help you stay on track and check your progress. It allows you to see whether you’re on track. But, it isn’t very specific. It also tends to focus too much on marketing.
You can adjust your marketing budget based on your goals. You can increase it if you think you’re spending too much money. But, you should be more specific and analytical.
With that said, here is a more detailed look at a more comprehensive marketing budget.
What is your marketing budget?
If you are looking to increase your sales and grow your business, your marketing budget needs to reflect those goals.
Consider the following questions when setting your budget:
- How many customers do you have?
- How do those customers differ in size and experience?
- What do they buy from your company?
- How can you attract new customers to your business?
- Do you have a niche or a business or industry that has a lack of competition?
- What is the best cost for your marketing efforts?
- How much marketing do you think you can do to generate more sales?
- How much is your marketing budget?
Additionally, consider your marketing budget with the following questions:
- What portion of your marketing budget should go toward online marketing and sales?
- How do you spend it? Which are the areas you spend the most money on?
- Which are the areas you spend the least money on? Do you want to build your brand?
- Can you increase your reach on social media and digital media? What are your competition’s strengths and weaknesses?
- What are their biggest areas for growth? Do you know what your customers are interested in?
- Do you know what websites and blogs your customers visit?
- How can you reach out to those customers and engage them?
- How much do your customers need? How much are you prepared to spend to reach your customers?
Once you have the answers to those questions, you can set up your marketing budget. It should include items like:
- Website development/web design/marketing tools
- Website development/marketing tools SEO/social media
- SEO/social media content marketing
- Content marketing Professional services and paid ads
- Professional services and paid ads PPC ads
This can be an extensive list. But, with a marketing budget, you’ll be able to run a more focused and targeted marketing plan and have the resources to do it.
Final thoughts on marketing budget planning
There is a lot of information on how to run a profitable business. There is also a lot of information on how to run a profitable online business.
However, when running your online business, your marketing budget is just as important. It can generate more profit.
But, a well-managed marketing budget will also allow you to grow your business more effectively.
Set a realistic marketing budget. Review it regularly.
Adjust it if needed.
If you’re prepared to market to your customers, you will be able to increase your business revenue.