How Should Your Business Budget For Marketing?

By November 1, 2018 November 20th, 2018 Blog

The need to establish a marketing budget is no secret to small business owners, but just how much to budget can still be mystifying.

First of all, it’s absolutely okay to admit that you don’t really have any idea where to begin on this. Most small businesses have no formal or consistent marketing line when it comes to their budget. And even if they do, they don’t have much basis behind that number. They’re probably not contemplating what’s a normal spend in their industry or just how much their competitors are allocating. Most people take the haphazard “shot in the dark” method when it comes to their marketing budgets.

In reality, no one really knows exactly what to spend on marketing. Each business is different, every industry is complex, and there’s several variables that are always fluctuating. There isn’t even common ground among experts: Should the budget be limited to just advertising? Are sales promotions included? What about PR? Furthermore, does it cover the cost of the sales team’s salaries and overhead?  What about the website? Social media?

One size does not fit all, despite popular belief. Budgets in general, not just marketing ones, are based on a large array of factors and deal with several different functions. The best any business owner can do is compare their spend to revenue, their competition, as well as any and every available data. So instead of worrying about what you’re NOT doing, just accept where you are and we can go from there. Now you can begin to effectively better your marketing budget, however it was initially established.

In order for your budget to be deemed efficient, you will need to decide which audience you want to target. You will want to begin with a broader market, something like age or income, then gradually narrow down. Aim for potential clients or customers based on more complex traits such as their shopping habits, their wants and needs, or their unique lifestyle. The more familiar you are with your targeted audience, the more efficiently you can adjust your approach.

After you’ve established the people your business wants to reach, the next logical step is to evaluate just how effective your message is. Is it appealing? Focused? Are you building trust while differentiating your brand? And just how goals evolve over time, your message will need to adapt too. Being deliberate with who you are as a company while tracking results will further assist in the process of determining your marketing budget.

There’s a lot to unpack here but the main idea we want to stress is that because there are so many factors to be considered, marketing budgets are personal and highly individualized. After several rounds of assessment, you can slowly begin to dial in on your audience and message while simultaneously determining whether to increase spend for greater returns or trim to improve margins. Eventually, something that started as a wild “shot in the dark” will begin to take shape and progressively become logical.

So instead of worrying about how much you should be spending, focus your energies on spending it more wisely.

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