Thirteen years ago, I was hired in the Marketing department at Nex-Tech and thought to myself, “What a fun job, I just get to come up with cool campaigns and spend money!” While my job is fun, what my 23-year old self wasn’t thinking about was all the backend work that goes into marketing. One of those backend items is a marketing budget. A necessity for any business.
As the years have gone by, I’ve been dubbed as the “budget guru”. (But, I really think I get that name because my co-workers don’t want to mess with doing the budget.) Believe it or not, I like handling the budget. It gets me familiar with everything that’s funneling through the marketing channels of our company and gives me the opportunity to see a lot of materials that we produce. I now get to help Advertising Solution’s clients with their marketing budgets as well.
Creating a budget could be daunting and intimidating. However, once you get started, it’s simpler than you think. First, you need to know why it’s essential to your business to have a marketing budget. Without one, your business would have a lack of focus. Where should you spend your time selling products? Which products should you sell? Did this sales strategy work? These are questions that lead to research and deciding where to allocate some of the marketing dollars. Let’s face it, times are changing and so are advertising methods. Creating a budget will allow you to decide who to target, which products to focus on and how much to spend doing so.
Before creating a marketing budget, you should:
- SET SOME GOALS. There might be a specific number of sales you want to reach, or a product that you want to roll out to a specific demographic. What are you wanting to accomplish? Knowing these elements will help you in setting goals that you can tailor advertising methods around.
- DEFINE YOUR MARKET POSITION. To determine where your business sits in the market, it may be necessary to draw out a SWOT analysis. A SWOT analysis is defining your strengths, weaknesses, opportunities and threats. By doing this, you will be able to figure out if there’s a product you need to advertise more to combat competition or if there’s an opportunity for growth. There’s numerous discoveries you will make in a SWOT analysis.
- OUTLINE YOUR PRODUCTS AND SERVICES PLAN. After the SWOT analysis is complete, outline the products and services you offer. What generates more revenue? What new products do you have? Who are you wanting to promote your products and services to?
- DEVELOP YOUR MARKETING PLAN. Your marketing plan differs from your marketing budget. The plan encompasses all other steps above and gives you the elements to include in your budget. You’ll want to think about how much you can allocate towards your budget and decide if you are creating your budget for a specific time period, such as a 3-month period or a whole year.
- OUTLINE MAJOR MARKETING ITEMS. This means you’ll want to decide if your major elements are events, large promotional campaigns, new product launches and so forth. These are elements you’ll allocate more dollars towards.
Once you have followed these five steps, you can move forward to creating your marketing budget. Be sure to include your elements – printed materials, signage, events, sponsorships, campaigns, digital advertising and more. You’ll also want to have a section in your budget for spend. Studies recommend anywhere from 6-10% of your projected revenue be set aside for marketing expenses. If you are looking into expanding your business, you’ll want to spend closer to 20% of your new projected revenue.
There are many other small details to include in a marketing budget, which can be found in this free budget template. The template will help you get started and is completely editable for your needs. Once you have begun using your new marketing budget, don’t forget to revisit your budget periodically. This will help you stay on track with your projects and spending. In addition, it’s important to make updates to your actual spent. Estimates are used when you first create your budget; however, you’ll want to make sure you don’t overspend and exceed what you projected.
You are now on your way to being a “marketing budget guru”! And if you ever need help, Nex-Tech Advertising Solutions is here to help you along the way.