Blog items tagged with "budget"
Tags: budget , tips , marketing , strategy , small business
Almost every small business owner is faced with the important question: "how much should we invest in marketing?"
While in some cases capital may be limited, a business's marketing budget should never hinge on what funds are left over after other expenses are taken care of.
Many new business owners and entrepreneurs make the mistake of waiting until their business is profitable before investing in marketing. Delaying this essential element is only counterintuitive and detrimental to a business.
The fact of the matter is, if your business is not generating sufficient revenue, how will it ever afford marketing?
Conversely, if your small business is failing to generate revenue, then a lack of marketing expenditure could be the reason why.
The Righteous Path to Small Business Success
Right from the start, it's critical that marketing is included in you company's business plan. This is particularly essential for start-ups.
Strategize and develop relevant, brand-supported materials that will bolster your business's marketing efforts. Such materials may include business cards and brochures, signage, and a website. All of this should be included in your business's financial projections and overall budget.
You should also determine exactly how your small business will establish a marketing budget.
Allocate a Marketing Budget for Your Small Business
One common approach is to allocate a percentage of your projected annual revenue as a baseline. This percentage will vary depending on the type of business, size, geographic market, and industry conditions - in addition to whether your business in brand new or established.
In most cases, larger businesses will allocate a smaller percentage for marketing. For example, Walmart has an annual marketing budget of about $2 billion, which accounts for less than 1 percent of its gross revenue.
For small businesses that earn less than $5 million per year, between 8-10 percent of annual revenue should be invested in marketing. Launching a new businesses, expansion, or product may even call for more. In these situations, it's not uncommon to invest up to 20 percent in marketing.
In addition to creating a marketing budget, determining how to spend your business's marketing budget can be even more challenging. It is important to write a well-defined marketing plan that includes specific activities and initiatives. It's equally important to know how you plan to track these activities.
With time, you can refine your small business marketing plan and budget to maximize profitability and overall success.
About the Author
Tyler Tafelsky is an Internet marketing manager here at OIC Group, Inc. He works with a number of small businesses in developing digital marketing campaigns.