A smart marketing budget is one of the most important things you can do for your business. However, a lot of small companies are afraid of it.
A small business owner recently brought up in a conversation saying that he wants to bring his business to the next level. Not knowing what the next level meant I asked him him to elaborate further, which he responded that he wanted more. After further probing I found out that he wanted more clients who could spend more money with him and that he wanted to do it in a profitable way.
Now the conversation was starting to become productive with a strong statement of intent, because there was a well defined objective. Our conversation after was heated and there was a sense of connection until the topic of budget was brought up. This is something all business owners / managers hate to hear.
There are multiple perspectives on having a budget. A bad perception on a marketing budget would be that having one would promote wastefulness. That is far from the truth.
An intelligent budget is the most important thing you can do for your business. It's as good as creating an action plan that would guide the actions required to accomplish an objective moving forward. It is important to figure out how to spend the marketing budget as much as figuring out how to do marketing.
Here are the 5 questions you to ask yourself before creating a marketing budget for your small business.
Q1: What are my needs?
Analysis: Do you need more leads? More sales? More people to know about your brand (also known as brand awareness)? With those goals in place you'll be able to better grasp the task at hand and to determine the actions you need to take moving forward.Q2: What are you currently paying to obtain your sales?
Analysis: In running your day-to-day business we need to find out how much you are currently spending to obtain clients or to get people to know about your brand. If you have sales representatives the cost of their labor and benefits will be set against your new sales. On the other hand if you have a storefront in a prime address you are perhaps spending more than you need to for foot traffic.Q3: How fast can you afford to grow?
Analysis: If you make RM 1,000 for every RM 5,000 in sales and you determine that you are willing to spend 20% on each lead for a sale, that's RM 200 you can afford to pay. Now you can ask yourself how many clients like that are you able to buy? (You can learn how to calculate your minimum and maximum ad spend budget here)Q4: Am I able to take that risk?
Analysis: Marketing is testing. There is no way for you to know if you will indeed get 10 clients if you spend it and ultimately risk not getting any clients at all. There's always an apparent risk that you may not get the ROI you are looking for when you are marketing your business.Q5: How do I minimise my risk?
Analysis: Before starting on your marketing journey and spending all of your money, even with you knowing that there are apparent risks involved with marketing, you should come to expect that you might fail. With a marketing strategy in place you are able to determine your maximum daily spend and you can therefore test in micro spends and hopefully it will lead you to your final objective.Start your journey with SMS Marketing, it's cost effective and its delivery rate is 100% and direct to the consumer. Find out more information here.
