Whether you own a restaurant, a dry cleaner, a beauty shop, or a business that solely operates online, there is one thing that is going to help drive your success: marketing.
It doesn’t matter how fantastic your product is or how exceptional your services are, if you don’t market your business, there is a very good possibility that you won’t achieve the success you desire.
Effective marketing will help to get your business noticed. The more your business is noticed, the more success your business will have.
A thoughtful marketing strategy utilizes a variety of tactics to create the most effective advertising campaign. This requires research to determine the mode of promotion that will have the biggest impact.
Being that marketing is so important to your success, it is highly recommended to set aside a budget specifically for marketing. These funds will allow you to create a marketing campaign that will help to drive your success.
How Much Money Should You Invest?
There is no clear-cut answer to this question. While one business might do well with a marketing budget of a few thousand dollars, another might need to invest more in order to create an effective marketing strategy.
The amount of money you set aside for your marketing budget depends on the size and type of business you have, as well as the type of marketing tools you plan to utilize.
While there is no cut-and-dry answer to how much money a business should put aside, there are some guidelines that can be followed in order to allocate enough funds to marketing. Interested in finding out how much you should invest in your budget toward marketing? Read on for some helpful guidelines.
Consider your goals:
Take into consideration your business goals. How much money do you hope to make? How much business do you wish to attract?
- Think about your audience:
Your audience will play a big factor in the amount of money you set aside for your marketing budget. Why? Because the type of marketing tactics you employ will be determined by your targeted audience. While social media may be an effective way to reach the audience of one business, another may need to rely on print ads.
- How competitive is your market?:
Do you have a business in a highly competitive market? If so, you will need to invest more in your marketing budget than a business operating in a less competitive industry.
- Is there a lot of strong competition?:
Consider how powerful your competition is. If you are going up against a powerhouse, your marketing budget is likely going to require more funds than a business that doesn’t have very strong competition.
Photo Credit: kenteegardin
Setting Your Budget
Once you have the answers to these questions, move forward and set aside a marketing budget that will work for your business. Here is a look at some popular marketing budget tactics many businesses employ:
- Percentage of revenue: You could set aside a percentage of your revenue for your marketing budget. Companies often set aside anywhere from 1 to 10% of their revenue to their marketing plans.
- Task-oriented budgeting: Perhaps the most simple strategy is task-oriented budgeting. This involves calculating the budget for all marketing tasks planned for within the year. Once the total for these tasks is calculated, set aside enough of a budget to cover that amount.
- Budget history: Another option is to take a look at the amount you spent last year on marketing. Consider how successful your past marketing efforts were, inflation, and whether or not you intend on making any changes to your plan.
- Track the competition: Many businesses set their marketing budget based on what their competition is doing. Research how much your top competitors spend on marketing and set aside the same, or a larger, amount of money. The idea is that if you spend as much as or more than your competition, you’ll gain more recognition.
- Random budgeting: While this may sound like a haphazard approach to budgeting, it is actually a tactic that many successful businesses use. This budget technique doesn’t follow any set rules or plans. Basically, you pick a number you are comfortable investing into your marketing budget, and then you work within that budget. While it can prove to be effective, it isn’t strategic and there isn’t any way to determine how successful your marketing efforts will be.
No matter what type of company you own, one thing is for sure: You will want to set aside money for marketing in order to get your business noticed. With enough money and the right marketing tools, your business can reap the many powerful benefits of marketing and climb the ladder of success.
Have any tips on determining a marketing budget that we missed? Share your thoughts in the comments section below.
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