Marketing can be a tricky element of your business to budget for because there’s no limit to the amount you could spend in theory. Whereas you can get accurate figures for many expenses, like fixed overheads, and have a good idea about variable costs such as material costs, marketing could be quite literally any number from zero to infinity! That is one reason it is difficult managing your marketing budget.
Nevertheless, you have to come up with a figure, and what often happens is that small business owners work out all their more quantifiable costs first, and whatever they have left goes down as the marketing budget. That’s not a very scientific approach, and understandably, many businesses struggle to spend their marketing budget effectively. In a lot of cases, that budget is far lower than it needs to be to enable you to make an impression on potential customers.
Prioritizing marketing
It’s easy to see why marketing budgets are often last on a small business owner’s list of priorities. If you have a fixed pot of cash with which to work, then it makes sense to assign money to the costs you can’t manage without, such as somewhere to run your business from, or the cost of buying in wholesale goods. If this is how you approach your marketing budget, just take a step back and see if there’s another way of dividing up the capital.
Imagine you could create a marketing plan without having to worry too much about the cost. That doesn’t mean you should start by planning a national TV ad campaign, rather you should consider how you can best get your message across to the right people at a level where you can manage your business growth. You might want to look at a Facebook ad campaign, for example, so work out what would be the most advantageous level of expenditure and set that aside as a sum in your hypothetical marketing budget.
When you’ve added all the costs together to form a marketing budget that fulfills all your current needs, you’ll probably be surprised to see it’s not going to cost you the earth to get started. Now calculate the difference between what you had as your original marketing budget and your new, ideal marketing spend. You should come up with a reasonable figure that allows you to achieve better results with your marketing without impacting too severely on your other expenses.
To find savings on the main budget that will accommodate the increased marketing budget, see what you can shave off your other costs. For example, if you compare business gas prices at Utility Bidder, you could find a cheaper deal that saves you hundreds of dollars a year. Repeat this across the other types of expenditure, and you could make up the difference between the old and new marketing budgets.
You may not reach your target, or you may exceed it, but by making the marketing budget more of a priority and assigning a sensible figure to it, you stand a better chance of running marketing campaigns that add genuine value to your business.
Tips for Managing Your Marketing Budget