Marketing is an absolute necessity for every business, and so are the inevitable associated costs. Whether you’re a brand new business or an established institution, you’ll need to figure out how much you can set aside for your marketing budget so you can get the word out about your brand.
Define Your Needs
Seeing your business on a billboard over the Kennedy Expressway during rush hour would give any small business owner a warm, fuzzy feeling...but if you’re a boutique pet store in Frankfort, you probably aren’t going to see much of a return on your investment. You can’t be everywhere all the time, so start small with a few channels. For example, a Chicago consulting firm may want to engage a social media marketing company to launch a targeted LinkedIn advertising campaign.
Start with an Estimate
If you go into the process of hiring a marketing manager or agency without doing research ahead of time, you’ll probably experience some major sticker shock. Before you even begin the conversation, have some preliminary figures in mind. According to the U.S. Small Business Administration, small businesses with revenues less than $5 million should allocate seven to eight percent of their revenues to marketing. However, this can vary greatly depending on the growth stage of your company — a retail startup can expect to spend up to 20 percent.
Measure, Reevaluate, Repeat
Your consumers are constantly changing, and your marketing plan should be flexible enough to catch their attention. The key is to have a system for measuring how your marketing dollars are affecting your business’s bottom line. Is your ecommerce site seeing more traffic? Did you get more service inquiries after a particular e-blast? Keep track of these important metrics and use them in determining where your budget should go.