Budgeting is a crucial operation for any business, small or large. In order for a business to reach success or remain successful, there must be some money allocated to marketing efforts. A well-planned marketing budget leads to the development of an effective marketing plan. This, in turn, will bring in new clients and more return on investment. Creative Sizzle has three basic tips for creating a strategic marketing budget.
Identify Your Goals
The first step in creating a marketing budget is to get your goals in order. A good way to start is looking at where your business is now and thinking about where you want to be in one year. For instance, your goals could involve growing your sales, hiring new employees, or opening another location. Whatever the goal, you must allocate an appropriate amount of money to the marketing budget in order to see results. Remember to invest in your business so clients are able to see the value in your company. Agreeing on a list of goals and working together to achieve them is crucial for developing a marketing budget.
Create a Sales Funnel
The best way to determine how much money to spend is through a sales funnel. A sales funnel allows you to envision the steps a potential client takes before making a purchase with your company. It is important to have knowledge about your target market because it allows you to understand how your audience interacts with your brand, what goals you should set and were to budget money in order to better reach your customers. In order to evaluate your sales funnel, Forbes suggests that you investigate the following:
- How many site visits you have
- How many leads you’re generating
- How many leads turn into sales or qualified leads
- What is the cost of generating qualified leads
- How many leads convert into opportunities
- How many of these opportunities turn into new sales
- What the value of the new deal is
After you evaluate all of this data, you can then determine what is working and what is not.
Organization is key. Create a spreadsheet that outlines all your business expenses. Once completed, you can figure out your marketing budget. As a point of reference, Forbes said that it’s common for small businesses who bring in a revenue of $5 million or less to distribute 7-8% of their revenue to marketing. Although it’s important to get a solid sense of all your expenses, your marketing budget should not receive what is left over after calculating all other costs. Rather, it should be a priority and be funded as such.
Once you set your goals, analyze your revenue, and organize expenses, an appropriate budget can be developed. Creative Sizzle is here to help with all of your marketing needs. Give us a call at 847-255-5555 or visit our website to learn more.