It’s normal for small businesses to focus their budgeting on marketing as it directly impacts growth. It’s exciting right? Launching a new campaign always looks so flashy and fun! Don’t make the mistake of mismanaging your budget – not every marketing venture is a wise investment. It’s so important to do your research on what marketing strategy is right for your small business.
Blindly putting money into random marketing tools won’t help you out at all, in fact, you’ll be haemorrhaging money. It’s best to take some time beforehand and do the planning. Set a solid plan with a comprehensive budget analysis based on strategy and/or research. This is how to get the most out of your marketing. Tracking your spending and the returns will help you make data informed decisions in the future so you’re not back in square one pushing money on ads that don’t help.
You’re probably wondering how to set a budget and what percentage of budget you should allocate to your marketing. That’s good, asking right questions means you’re on the right track. We’ve got some tips for you to help establish a healthy budget that won’t dry out your bank account.
Before you go ahead, there’s a few things you’ll need to know.
What are your current marketing ventures and what are the returns on those?
Do your competitor research. How and what are they spending their marketing budget on?
See how different scales of budgets will affect your other budgets.
Creating a marketing budget
The first step in creating your budget is to know what ventures have yielded high returns and what do not work anymore. Don’t need to fix what’s not broken. This doesn’t mean you can’t experiment and with the ventures that work already. Think about ways to make them more efficient, maybe allocate more budget towards it. Trends are everchanging, so you’ll have to keep on top of this.
Here’s a 4-step plan of action to take when evaluating your budget.
- If your overall budget is small start small. You don’t need to spend thousands on marketing if it’s going to negatively impact your other business activities. This is where a sold strategic plan comes into play. If your budget is small, don’t spend thousands on a billboard that your ideal clients likely won’t see. Research into Google Ads and AdWords that will directly benefit your business.
- Create specific, measurable, achievable, relevant and time-based (SMART) goals. What are the goals of your objective and are you being realistic with your budget and expectations? Knowing all these factors will heavily dictate how your budget is allocated and what ventures to take on. For example, if your goal is to brand awareness you may invest more into social media but if your goal is to increase sales you might want to invest in email marketing.
- One thing any marketer will advise you to do is to track your stats! If you’re not making data informed decisions, then you’re wasting resources. Knowing who, what, when, where and why your audience is responding to your marketing means you can double down on the ventures that are already working and let go of the ones hurting your business. Keeping track of statistics will also help you understand how to improve the efficacy of a strategy even if it’s already working.
- Plan your next steps using the data and research you’ve compiled, and the steps listed above. Plan, do, review.
The aim is to eliminate marketing methods that are losing you money. The trick is to get the right balance of keeping methods that work and experimenting with new methods – if you don’t try, you’ll never know. New methods will bring in new clients so never be discouraged from trying something new. Just keep in mind to track and review performance to stay as efficient as possible.
For more marketing advice to help your business, check out our other blogs.