What's Our Budget?
You are starting a new business and you have your financial
investments or start-up cash but now you need to determine how the money will
be allocated. How do you plan to spread out your initial start-up capital?
Better yet, how much will you utilize to fund marketing? This answer is never
the same, factors that are considered include industry, business size, desired
rate of growth, target audience, etc. Too often are marketing budgets
undervalued or under estimated. Do not be afraid to invest in your marketing;
however, if you do not have a strategic marketing plan, you could throw money
down the drain. Know your market because that will tell where to spend
marketing dollars and how much.
Marketing budgets should reflect two significant roles:
brand development and ongoing campaigns. Brand development includes logos, Web
site creation, brand standards, marketing collateral, sales presentations,
social media accounts (most of them have a free level), etc. Ongoing campaigns
may include seasonal advertisements (online and offline), radio announcements
or TV commercials –honestly most small businesses may not utilize these mediums
until they have established a client base, primarily because it is very costly.
Based on what we know thus far, the less revenue you expect to generate initially,
the more you should spend on marketing.
Since each industry is varies, let’s consider two popular
industries” government contracting and retail. If you are in the Government contracting
business, you may spend 1 -2 % less than your counterparts, why? The government
does not appreciate, nor do they desire fancy brochures, more often than not,
they prefer for you to stick to their guidelines given in the RFP or Request
for Proposal. A company can have points deducted for not following the RFP
guidelines. Now on the flip side, retail companies typically spend about 20% of
net sales on marketing. Why? They need to be everywhere their target customer
is going to be, on TV, online, at school, work, you name – they have an ad
there.
Lastly, you do not have to spend all your bucks on marketing.
The key is to figure out what will give you the best value without cutting out
essentials. Plan accordingly, allocate efficiently and live successfully.
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