A marketing budget is basically a financial plan that allocates a certain amount of resources to marketing. It can be designed to span a short amount of time, like monthly or quarterly, or be a plan for a year’s worth of marketing efforts. A marketing budget should include all the costs associated with marketing for your business, which could mean paid ads, marketing tools, the cost of hiring a marketing professional, website maintenance expenses and more. To say that having a marketing budget is advisable is a vast understatement. It is vital, and here’s why:
1. It Keeps You on Track.
Without a marketing budget, your marketing efforts can become a bit disjointed. A marketing budget can help you stay on track, knowing you have enough resources to cover what you need to pay for and not run out midway throughout the month or year.
2. It Ensures All Needs are Covered.
It also helps you allocate the right amount of resources to each category of marketing and not go overboard on any one element. For example, without a marketing budget, you might be tempted to spend too much money on your website or an email campaign but not enough when it comes to paying someone to manage said site or email campaign. A budget gives you the ability to clearly define your marketing goals and make sure you have all your bases covered.
3. It Helps You Set and Reach Goals.
You need to set realistic, attainable goals for your business’ marketing strategies. Having a budget helps you do just that by forcing you to focus on only what is most important for your particular business. It can also help you narrow down what does and does not work for you, which means you can put more eggs in the basket of a tried-and-true strategy and allocate fewer resources towards the long-shot attempt.
4. It Helps You Play the Long Game.
Highly effective marketing strategies are not typically one-and-done. They take a consistent effort and require a long-term strategy. Obviously, you must have some flexibility if a strategy simply isn’t working. A marketing budget should not seem limiting but instead freeing as it allows you to reach towards the stars and go for the home run. You don’t have to think just about tomorrow or next week, but can plan months in advance, even an entire year. You don’t have to react to every slight shift in the market but can instead stay focused on the steady horizon up ahead which is your long-term marketing goal.
5. It's an Investment in Your Business.
When you think of marketing as one more item on your list of costs, one more expense, you are thinking of it all wrong. Instead, you should consider marketing an investment in your business. A marketing budget should also be seen this way as that is exactly what it is, you are investing resources in the growth of your business.
6. It's Necessary When Hiring a Professional.
The final reason you should consider creating a marketing budget is the fact that doing so can give you the freedom and resources you need to hire a professional. Many businesses don’t think investing in a professional marketing team or company is a wise use of resources, but when you consider the revenue and the brand awareness that can come from hiring a professional team, it doesn't seem nearly as costly. Thankfully, by creating a marketing budget, you can allocate the needed funds to hire the professionals you need to help your brand succeed.
Budget is not a term any of us love. However, a marketing budget can be exciting when utilized properly. The six factors listed above are just a few of the countless reasons you should take the time to make sure you have one...and are using it.
Need a ballpark place to start? The average standard is to budget 5-10% of your previous year's gross sales for marketing. Of course there are a lot of factors that go into determining the correct percentage for your particular business. You may actually need to spend more, or perhaps you could get away with doing less…but 5-10% is the general rule and a good place to start. Need help? Give us a call.