by Donovan Dillon Contributor
Posted on April 02, 2015 00:22 AM
Establishing a small business marketing budget can be a difficult task, but it is a critical one in order to create a marketing plan that achieves the goals set by the company. Too often, because small businesses are working within extremely tight constraints, their marketing budget lacks structure. Too often, it fails to include important marketing tools, such as a digital marketing strategy, and can lead to businesses spending too much on marketing efforts that do not work while not spending enough on those that do.
Create a Plan
The first step in creating a small business marketing budget is to create a marketing plan. The initial question to ask is, what it is the company wants to accomplish through their marketing? Is the goal to drive people to the website? In stores? Engaging on social media? Once that has been determined, the plan should work toward achieving that goal. Consider all types of marketing with a focus on a digital marketing strategy using the right tools, platforms and people. In today's digital age, digital marketing is a critical part of any small business marketing efforts.
Determine an Amount
Once you have developed your marketing plan, you need to determine what portion of revenue will be allocated to marketing. According to the Small Business Administration, approximately seven to eight percent of revenue should be set aside for advertising. This means if your business makes $100,000 in revenue, you should have a marketing budget of between $7,000 and $8,000 per year. This breaks down to between $580 and $670 per month, which may seem like a lot of money to some companies. However, if your small business marketing budget is allocated properly, you should see a significant return on your marketing investment.
Breaking Down Your Budget
Once you have determined how much you will spend per year on marketing, it is important to break down the total into segments to determine where you will spend it. One thing that should not be overlooked in your small business marketing budget is the need for a digital marketing plan. Take a look at your website. Does it need overhauling? Is the website you are currently using one that you put together yourself? If so, you may want to consider allocating a portion of your budget this year on hiring a qualified web developer who will give you a better product in less time. Remember, time is money, and as the owner of a company, you probably don’t have time to create a website that not only reaches a large audience, but is streamlined to the point that it is easily managed.
Saving money is important, especially regarding marketing efforts, but there are times when spending money may actually increase your bottom line. In those cases, it is important to consider that an initial outlay of cash in your small business marketing budget may bring additional cash into your company over time. To learn more about how MODsocket can help take your small business marketing efforts to the next level, explore our website and fill out the form below for a free 30-day trial.