How to Create a Marketing Budget for Your Business
Effective marketing is crucial for the success of any business, and every business should have a marketing plan and dedicated marketing budget. If your business is just getting started, you might be tempted to try building a buzz around your brand using free methods like a DIY approach to social media marketing or content marketing, but those are longer-term solutions and to bring in early revenue you really should have some money earmarked for your marketing activities. More established business can also benefit from having solid marketing goals and the necessary funds to see those goals come to fruition.
Set Your Budget
There are several ways that you can set your budget. You, or the person in charge of your organization, can set a firm figure; you can decide to match the marketing spend of your closet competitors; you can set your marketing budget at a percentage of your sales; or you can determine how many new clients or customers you want to acquire each month.
In this last case, for example, you would look at your records and figure out how many new clients you actually sign up per 100 prospects. If you typically sign up five clients from 100 leads and you want to sign up 30 new clients each month, then do the math and work out how much it will cost to attract 600 leads. That figure will give you your budget.
What to Include in the Budget
Obviously, you’ll need to include all forms of paid advertising that you use, so track expenses for TV and radio spots, newspaper ads, sponsorships, direct mail campaigns, email, content and social media marketing, pay-per-click campaigns, etc. And don’t forget to include the cost of the content and the graphics created for your marketing efforts.
You’ll also need to budget for brochures, flyers, t-shirts, bumper stickers, calendars, pens, and any other promotional marketing collateral that you intend to use.
Your website costs: construction, hosting and maintenance should also be included in your marketing budget.
How to Keep Track of the Numbers
The best way to keep all of your marketing figures straight is to have an accountant on board. This can be someone that you employ directly, or you can use the services of an outside contractor.
A good option for smaller firms is to have an existing employee, or even yourself, undergo some education to obtain an accounting qualification, and then you or your employee can work on the marketing budget in the future.
Today, it’s possible to study for an accounting bachelor’s or an accounting masters online, and an online MSA program takes roughly two years of part-time study (evenings and weekends) to complete.
Paying for an online MSA degree isn’t money thrown into a black hole because the costs of the degree are tax deductible. Currently, the IRS allows a deduction of $5,250 per year for tuition costs. You must make sure that the degree program is delivered by an accredited school, like New England College, to qualify for the deduction.
Setting a marketing budget and tracking your advertising expenditure and customer conversions will let you determine how much your new customers cost, so you’ll be able to see which marketing activities perform the best and concentrate future efforts in those areas.