One of the most effective ways to ensure that you make the right investments in marketing, is to develop a comprehensive marketing plan. We’ve covered everything that should go into your marketing plan, in detail, and our guide to planning your marketing budget should be seen as the next essential step.Your marketing budget will not only help to ensure that you are able to reach your goals, but a closely monitored budget will also mean that you can avoid overspending, and you won’t be at risk of discovering unexpected expenses at the end of every quarter. A budget can also help to keep your business focused, and you may be able to cut costs and increase efficiency based on what you spend, and the results that you see.Planning a marketing budget is simpler than most people think, and with some professional tips you can design a detailed budget for your small business.
Get Your Finances in Order
To be able to create a marketing budget that is both affordable and appropriate, you’ll need to have a clear record of your current finances. Income should be recorded for every month that the business has been in operation, and when you start your marketing budget, it can help to go back as far as six months to find your baseline minimum revenue. If your company has existed for more than six months, then you can look at up to 12 months of data so that you have the most accurate understanding of your finances.Your minimum revenue is the lowest expected amount of revenue for a specific reporting period. Revenue can vary throughout the year, and the minimum revenue would be the lowest figure from a reporting period.From your minimum revenue, expenses, wages, taxes, and all other deductibles should all be taken into consideration. This would leave you with a figure that represents profit (in a basic sense). This is where your marketing budget will come from.Most small businesses spend 5% – 8% of their total revenue on income. Your own figure will depend on what you can afford, keeping in mind that not all of your disposable business income should be spent on marketing. Some of your profit after expenses should be saved for unexpected costs in the future, expansion, and other projects.With a clear picture of your finances, and your disposable income after expenses, you’ll be able to set an accurate figure that can be allocated towards your marketing budget.
Distributing Your Marketing Funds
Knowing the total available funds is just the first step of marketing budget planning. With that figure, you’ll now need to look at your marketing plan and determine how the funds will be distributed. At this stage, be aware that your budget may not allow you to implement your marketing plan in its entirety. You may need to sideline some of your marketing channels and run preferred campaigns until you are in a position to grow your budget. This is one of the reasons why a marketing plan is so important. During your plan you would have identified the most promising marketing channels. Many businesses list these in order of priority, which can make it easy to distribute funds. A marketing plan is fairly long term (usually up to 12 months), so a monthly marketing spend could change from month to month, as you remove underperforming marketing channels and invest in new ones. For small businesses, flexibility is an advantage, and the feasibility of low cost marketing channels will also help when it comes to budgeting. Social media marketing, blogging, link building, and other forms of SEO, are relatively inexpensive. Even if you outsource some of these marketing tasks, you’ll find that you can accomplish a lot on just a small budget. Over time, you will start to see your marketing plan and your marketing budget as closely interlinked business documents. Your marketing plan will help guide you when prioritizing your budget, and your budget will give you clear indicators of expenses, helping you to cut or reduce investment in overpriced and/or underperforming channels. As your business grows and your revenue increases, you’ll be able to think bigger when it comes to your marketing plan, and you’ll be able to allocate a larger budget to achieve your goals.
Keep Records with a Marketing Budget Spreadsheet
Some companies use business management software to manage finances, customer relationships, inventory, distribution, staff, and the majority of their back office tasks. If you’re one of the few small businesses already using a turnkey business management solution, then you’ll be able to record and track your budget in the software. However, for most small business and startups, business management software will be out of scope, so you’ll need a simple and effective way to record and track your budget. A spreadsheet based budget will be simple to manage, and spreadsheets offer powerful calculation functions, as well as graphical interfaces that make it easy to record, view, and update a budget. Now that you know what goes into a budget, you can start to build your own using software like Google Documents or Microsoft Excel, or you could even start with a simple template. Small business marketing budgets are essential to achieve goals, increase efficiency, and drive revenue. If you want to see your business grow and succeed, then it’s time to get started with your own marketing budget planning. At Low Price Articles we are committed to helping our customers succeed, whether that be through offering high quality articles for competitive prices, or by offering free information to our fellow business owners. Feel free to download our free marketing budget template today.