Budgeting is a crucial operation for any business, small or large. In order for a business to reach success or to remain successful, money should be allocated to a marketing budget. A well-thought out marketing budget leads to a successful marketing plan which brings in clients and revenue. The old adage “you have to spend money to make money” rings true with marketing. It is typical for start-up businesses to spend more money on marketing than businesses that are already up and running. Creative Sizzle has three basic tips to keep in mind before developing a marketing budget.
The first step in creating a marketing budget is to develop some marketing goals. A good starting place is looking at where your business is now and what you foresee in a year. For example, a goal could involve growing your sales by a certain percentage throughout the course of the year.
Once you have developed these goals, hold a meeting with your executive, sales, and marketing teams to review. At the meeting discuss how much money needs to be allocated to this new marketing plan. Once approved, implement a plan to work towards accomplishing these goals.
Create Your Sales Funnel
One of the best ways to figure out how much money to spend and what you are spending it on, is by creating a sales funnel. A sales funnel is similar to a buyer’s journey. It allows you to envision the steps a potential client takes before making a purchase with your company. It first determines awareness, interest, decision, and finally action. Knowledge about your target market is essential to making this plan successful. This information helps you understand how your target market interacts, where to set goals, and where to budget to better serve your customers.
There are a few ways to evaluate your sales funnel.
- How many leads you are generating.
- Are any of those leads turning into qualified lead and how many.
- How many of these leads converted into opportunities
- Did any of these opportunities become a new deal or sale.
- What is the value of the new deal.
After evaluating the data, determine what is working and generating the best results and what is not. Therefore you can use that data to decide where to cut spending and where to allocate more funds.
Organization is key. Create a spreadsheet that outlines all of the costs of your business. After the costs are outlined, figure out how much you have to spend on creating a marketing budget. To break it down further,
a company’s marketing budget should be a certain percentage of your revenue. For B2B businesses, they should consider spending somewhere between 2 and 5% of their current revenue on marketing. The spend amount is different for B2C companies and is between 5 and 10%.
Budgeting and planning is an important operation for any business, large or small. Remember, in order for a business to achieve success or maintain success, some money must be allocated to marketing efforts. To learn more about creating a successful marketing budget, check out our Sizzlin’ Tip.
Once you set your goals, analyze your revenue, and organize the costs of your business, an appropriate budget can be designed. Give us a call at 847-345-6329 or visit our website and have Creative Sizzle help you with creating an efficient marketing plan.