The Secret to Making a Marketing Budget
Hi, good morning. Today’s topic is going to be about the secret of making a marketing budget for your small business. There are three basic ingredients that you need to make that marketing budget.
The first is, how much revenue do you want to have in the next 12 months? The second thing is, how much money do you have available to market? The third thing is a source to make up the difference.
Let me break this down a little because there are minor ingredients in that. The first thing is, how much revenue do you want? Let’s say you want $100,000 in revenue over the next 12 months.
There’s a couple of ways of looking at that, and these are just guidelines. If you want to stay where you are and you had $100,000 in revenue, you’d put about five percent of your money toward a marketing budget. You’d put $5,000 toward your marketing budget. I would go a little bit higher and say six, so that would give you $500 a month.
If you want to grow, then you would put about $10,000, which is 10 percent of your budget into that, marketing. If you really wanted to grow aggressively you’re looking at 15 to 20 percent, so $15,000 to $20,000 into your marketing budget.
This might seem high to you, especially if you’re like most small businesses, who don’t have anything invested in marketing, or you’re having trouble growing your business because you misallocate your marketing budget, but that’s pretty much a good rule of thumb right there.
The second thing you have to do is look at, how much do you have available to market? If your goal was $100,000 in revenue and you say, “I want to grow, so I need about 10 percent, so I need $10,000 to market, but I only have $5,000,” well, that’s not bad in itself because you can allocate it monthly and you’re not going to spend all the money up front.
That’s not bad, but what you have to do is look for the third ingredient, going, “How are you going to make up the difference?” Hopefully, if your marketing is done right and the market’s responsive to your offers and what you do, your marketing is going to produce revenue early on to produce that revenue later in the year when you need it for marketing.
It generally works fairly well if you do that, but if you don’t have anything to start with, etc., you really need to go, “I need to find a source of revenue to make up that difference. If I need $500 a month for marketing and I don’t have any revenue in my business right now,” well, you need to find a way to have that money available, whether it be credit, credit cards. Hey, some people get a second job.
I mean, how dedicated are you at growing your business? If you’re dedicated you know you need money to help market. That’s just a fact of life, and the bigger companies out there do it. Show me a company out there that isn’t marketing and spending money on marketing, and I’ll show you a company that probably isn’t going to be in business very long. Apple does it. Microsoft does it. Amazon does it. Everybody else does it. I’ve mentioned that before.
To sum it up, remember when you’re looking at making a marketing budget the secret really is to have those three ingredients; how much revenue you want, how much money you have available, and a way to get more money so you can market.
OK. Thanks, have a good day. If you need any help, just contact us at justsmallbiz.com. You can reach me personally at firstname.lastname@example.org, or (321) 613-8476. Thanks.