Marketing plays a crucial role in business growth, obviously, but it’s shocking how many small businesses and the entrepreneurs don’t place sufficient emphasis on it. When marketing gets pushed to the side, you can usually attribute it to the low appeal of delayed gratification.
Businesses want to see immediate returns, but marketing often demands long-term patience. Start with mastering patience and proceed to budgeting.
When you’re ready to address marketing budgets seriously, ensure you place these 4 basic concepts at the top of your list of considerations.
1. Average Spending Habits
You don’t want to base your spending habits primarily on the behavior of another firm, but it can be instructive to see how others are budgeting for their marketing initiatives. According to the 2016 State of Small Business Report from Wasp Barcode, :
- 9 percent of businesses invest nothing in marketing.
- 25 percent of businesses invest 1 to 3 percent of revenue in marketing.
- 29 percent of businesses invest 4 to 6 percent of revenue in marketing.
- 24 percent of businesses invest 7 to 10 percent of revenue in marketing.
- 9 percent of businesses invest 11 percent or more of revenue in marketing.
This clearly indicates the sweet spot lies somewhere between 1 and 10 percent. More than four out of five small businesses fall into this range.
It’s also useful to note that 62 percent of small businesses invest more than 4 percent. This doesn’t necessarily mean that you should. It does suggest what works for other businesses, however.
2. Where Small Businesses Invest Resources
The report from Wasp Barcode also states that email, website, and social media are the top three marketing tools currently in use by small businesses.
Once businesses reach roughly 51 or more employees, Internet advertising becomes an additional priority.
3. Organizing Financial Information
The first step in developing a marketing budget is to organize all your financial information. Understanding your finances starts with organizing your revenue information. You need to know how much money your company makes on a monthly basis and the variations that might exist.
Although income can vary significantly throughout the year, you must organise the information based on a reliable revenue. That is, the minimum amount of money your company makes each month.
For example, if your revenues range from N10,000 to N15,000 per month, the reliable revenue would be N10,000. Anything above this should be regarded as extra and should not be used to determine your budget.
4. Determining Where the Audience Is
If you want to enjoy a high ROI on your marketing investments, you have to determine where your target audience is. Spending money on the wrong strategies and mediums is the worst possible thing you can do with your budget.
Take time to develop buyer personas and make sure you know where they’re spending their time. A great way to study audiences is by analyzing your social media followers. They’ll tell you a lot about who they are by the content they share, comments they like, photos they post, and what they write.
If you want your business to grow, then you have to have a concrete marketing strategy in hand. At the heart of every marketing strategy is a well-delineated budget.
Most people don’t find the term budgeting very sexy, but it’s imperative that you gasp the essence of it and build a plan that will enable your operations to flourish. Keep the preceding tips in mind and see where your budget takes you.
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