Marketing for Small Business; Four Keys to Create a Budget in the New Year
in Small Business Marketing on January 9, 2020
A successful small business marketing plan means setting goals, assessing your cash flow, diversifying your marketing efforts and measuring your results.
For a small business owner, the new year is a great time to take stock. What successes from last year can you build upon? What new goals can you set for your business for the coming year? What are your plans for growth and expansion? How are you going to achieve those goals?
Setting a budget to market your small business should be at the top of your to-do list. But how do you know if your marketing budget is right for your business? There are differing schools of thought on strategies for setting a marketing budget. Some companies follow the tenet that your marketing budget should be a percentage of your total revenue … anywhere from one to 10 percent, based on your industry, how long you’ve been in business and what you can afford. (The SBA recommends between seven and eight percent for businesses that gross less than $5 million per year.) Some companies simply carry forward what they did last year, perhaps increasing it by a percentage. And some companies don’t set a budget at all. They simply react to opportunities as they arise, then wait to see if those opportunities yield results. (Also known as the “throwing spaghetti against the wall to see if it sticks” approach.)
So, what’s the right marketing budget for you? There is no single, right approach. However, there are some things you should consider before you try to set a number. Check out these four essential ingredients to create a marketing budget for your small business in the new year.
- Tie your budget to your goals. The first element of setting your marketing budget is setting goals. Get specific with your goals, as they’ll help you decide where to focus your marketing efforts. An article on Entrepreneur.com suggests setting two or three attainable goals, such as improving PR placements, sales conversion rates or market share by a specific percentage, in addition to the typical goal of increasing revenue.
- Find a way to finance your marketing. Growth doesn’t typically come for free. An article on Forbes.com suggests that you consider marketing as an investment, not a cost. Marketing is often an overlooked element of a small business owner’s budget. If you’re serious about growing your business, you might need to look into some small business funding sources that will give you the cash flow you need to invest in growth while still covering your fixed operating expenses.
- Budget for a diversified marketing plan. The old adage about not putting all your eggs in one basket certainly applies here. It’s essential to develop a diversified marketing strategy that includes multiple channels that make sense for your market. These may include: digital marketing, pay-per-click advertising (PPC), traditional advertising, search engine optimization (SEO) through blogging and website content, social media, association memberships and networking, and lead generation efforts.
- Measure your results. Regardless of which elements your marketing plan includes, measurability is key to planning future successful marketing budgets. Tracking your results to see which approaches are actually generating leads, increasing revenue and creating ROI is, by far, the best way to chart a course for future sales and marketing spend. If only one avenue is generating results, you might choose to discontinue other platforms (for example, traditional advertising) and put those dollars into more online lead generation content, if that’s what’s working.
The bottom line
Marketing your small business is essential for growth. So, if growth is a priority for you this year, let your marketing budget reflect that. Spend some time creating your goals, doing some research on ways to fund your marketing, develop a diversified marketing plan and keep an eagle eye on your results. Then, do more of what’s working and dig in a little deeper next year. As you do, you’ll grow fearlessly and take your business to the next level.
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