5 Steps to Creating a Small Business Marketing Budget

Article about 5 Steps to Creating a Small Business Marketing Budget

Published by

Apr 16, 2021

Solid planning is paramount for any small business owner. Being able to adapt on the go is also helpful, however, with no planning, ahead comes zero success. Specifically, small business budgets can be tricky. There might be a small number of staff operating in several departments at a time. 

According to the U.S. Small Business Administration, many small companies do not budget enough for marketing, or their marketing strategy is based on a hit-and-miss basis.

What is the marketing budget?

A marketing budget refers to the cost of organizing the trade exchange of the company and its information communication with the buyer. It also entails a set of measures to promote the sale of a product. As for digital promoting, we usually include these:

  • content marketing

  • promotion in social media

  • email marketing

  • branding

  • SEO techniques

  • affiliate marketing

There are, basically, four types of digital marketing that produce the best results, and they are:

  • email marketing

  • social media marketing

  • SEO optimization

  • content marketing

Even if you are on a tight budget, you should try different channels before choosing the best ones.

There Is No One-size-fits-all Marketing Budget

Each business is different. Based on your target audience, products, or different points of interest, your promoting spending plan may not be quite the same as that of another small company, even in a similar niche.

The best advertising specialists adopt a holistic strategy for promotion. It is anything but a one-size-fits-all recommendation.  

It is not generally as straightforward as recognizing your demographics and focusing on them solely.  Based on the size of a company, the industry, the upcoming goals and targets, and other considerations, marketing budgets can vary widely from business to business.

Even with the countless factors to consider, it’s still vital to come up with a strong spending plan for your small business marketing. Having a plan will guarantee you are allocating your marketing dollars efficiently and effectively.

Step-by-step Guide to Marketing Budget

You can’t know what roads to take if you don’t know where you are going. So setting a goal before creating an advertising budget is very important. Nevertheless, there are good goals and bad ones. For example: “I want to make my e-commerce store more popular.” That is a poor one because it’s too vague. You can’t measure the results. Another example: “I want to attract 500 unique visitors each month.” That’s a good one. It has clear numbers, it can measure, it’s time-bound, and it’s specific.

It’s a common practice to set not one, but two or three goals and spread your marketing budget between them. Once you have a clear objective, you can predict what promotion channels will bring the best results.

1: Identify your target audience

It will be difficult for you to sell your services if you do not know who you are selling to. The client profile is the basis for choosing communication channels to deliver your advertising message to the buyer. Consider the following questions:

  1. Who do you sell your services to?

  2. What are the real expectations of clients from the deal?

  3. Does your service meet these expectations?

The term "client profile" is common for many marketers. It means that you must understand the type of person your market attracts. A nightclub will attract young people with money so that they can spend it. Anti-age skincare products will mainly attract women of a certain age who want to keep their skin smooth and soft.

Also, recognizing your customer profile will help you spend your marketing money wisely. Let’s say your target audience is older people. Hence, it’d be wasteful to choose social media as the main advertising channel. However, do not limit your potential customer to one age group or specific gender. Make sure you explore all possibilities.

2: Evaluate your previous campaigns

The second thing you want to do while planning a budget is evaluating previous marketing campaigns. Assessment is a significant part of marketing. It helps your company weed out ineffective techniques and build up a solid.

By scheduling regular evaluations of your marketing plan, you can save money by modifying or eliminating campaigns that are not arriving at your objective market or collecting the reaction you need. Specifically, it is essential to assess previous budgets. Make sure you do your research on how much you spent, where you spent it, and the final result. You should also focus on money that was wasted and had no impact.

3: Do A Competitive Analysis

The next step is to pinpoint your major competitors and research their marketing strategies.

“No business strategy ever survives the first contact with the marketplace” - mentioned Samuel Hew, Head of Data Research and Content Marketing at Linksmanagement Backlink Service.

As there is always a vigorous competition to conquer the market, you should always adjust your strategy to the business realities. And the best thing to do is to analyze your competitor’s performance. A competitive analysis allows you to keep your finger on the pulse of your niche. What is more important, you will know what marketing strategies will give you maximum benefit.

4: Decide on the amount

Step number four is deciding how much you can allot for advertising. There is no one-size-fits-all answer for this. There are all sorts of factors that go into helping you figure out how much money you can spend. These include:

  • Your company's revenue

  • Customer churn rate 

  • Your company’s objectives

In general, the advertising budget is the reduced cost of attracting one client multiplied by the number of required attracted clients. In reality, however, it is not that straightforward. Hence, in most companies, the budget refers to a percentage of the company’s turnover.

5: Know the Current Position of Your Company 

Last but not least is to make sure that you're tracking your success in your failures. Keeping an eye on Google Analytics, Facebook analytics, and email platform analytics will help you monitor your interim results.  All you need is to set a calendar and then check those analytics religiously. This way, you will know your weaknesses and failures. Tracking your performance will allow you to cut your losses in the long run.

The Takeaway

From managing to advertising and everything in between, running a small business presupposes never-ending challenges. If you are setting out with allocating marketing dollars, it is better to start simple. As there are myriad channels, stages, and approaches to try, creative marketing ideas never wear thin. And since there is no cut-and-dry formula, follow our tips and stay vigilant. 

 

 


Articles authored by Marie Barnes