DETERMINE YOUR MARKETING BUDGET: YES, YOU CAN

here’s a wise old saying, “you have to spend money to make money.” Yet its not as simple as spending cash to get a return - there needs to be a rhyme or reason.

Business owners commonly question just how much to allocate for their marketing budget in order to see a return without wasting valuable dollars. So what’s the right balance?

THE ANSWER IS: IT DEPENDS.

There are many factors that can influence the amount you spend on marketing. Things like:

• How long have you been in business?
• How easily recognized or established is your brand?
• What’s your industry?
• What size is your company?

The U.S. Small Business Administration suggests that most small businesses with less than a $5 million budget should spend about 7 to 8 percent of their revenues on marketing, splitting the cost between brand development and promotions.

That said, a startup company might spend up to 20% of its budget while working to gain recognition. You also need to be aware of your existing profit margins and adjust your marketing spend in order to avoid devastating those percentages. In essence, don’t simply save the “leftovers” for your marketing budget, but don’t think you can get away with spending zero.

SPENDING YOUR MARKETING BUDGET WISELY MATTERS, TOO

It’s important to commit to a certain dollar amount for your marketing budget so that you can set realistic expectations and goals for your efforts. Then, its important that you spend these dollars wisely aligned with that strategy.

This means, take some time setting up SMART goals for your marketing strategy, and also be sure to check out our essentials tools to kickstart your marketing strategy.

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