Creating a marketing plan without a marketing budget is like buying a car without the requisite gas. No matter how much income you generate with your small business, you must put aside a portion of your income for marketing. Here we show business owners – in the business of selling consumer products –how to put together a basic marketing plan and budget.
The first thing most small businesses think is that they don’t have the money for a marketing budget. Remember that marketing is critical to generating business; without marketing, no one knows that your small business exists! Even if you are on a shoe string budget of a few dollars per month, you must allocate a substantial percentage of revenue to a marketing budget.
If you have serious reservations about marketing your small business, start with 10% of your revenues. Most marketing gurus specializing in either online or brick and mortar businesses say that 10% of revenues allocated to marketing is the minimum level required to make the investment effective. For example, if your business generates $2,000 per month, a marketing budget of $200 would buy a press release distributed online, or several articles or blog posts written by a talented writer.
Start with a Plan
Before you can put together a marketing budget, you need a small business marketing plan. There are plenty of simple, innovative, and effective marketing plan templates available through docstoc. Whichever plan you choose, the basics should include:
- Overview of your company and the products you provide
- Analysis of your industry; who are your competitors?
- Opportunities and threats for you in your market
- Your goals and objectives
- Target markets
- Details on how you will reach your goals. Under each (i.e. PR campaign), details on how you will use this marketing tool.
- Timeline for each tool/strategy
Spend time researching your target demographic. How does your consumer audience like to receive information about your service(s) and others like you? For example, television commercials are often not as successful as an effective online video campaign, but your business and general industry determine which format to use.
- Explore social media, websites and publications that target your market.
- Research which channels are most effective at reaching your clientele.
- Conduct surveys using free tools like SurveyMonkey to help you determine how your audience responds to different marketing channels.
- Once you’ve identified the best methods, build them into your plan.
Keep your plan handy; don’t hide it in a drawer! Refer to your marketing plan throughout the year, checking to see if you are on track to meet your objectives. At the end of the year, you can assess your success and revamp the plan for the upcoming year.
Building Your Budget
Once you have your marketing plan in place, create a spreadsheet like this one to organize each of your marketing tools and assign a cost to each tool for every quarter in the fiscal year. Include every marketing channel that you have considered using, including:
- Print media
- Promotional items (t-shirts, keychains) to pass out at events and trade shows
- Press release distribution
- Email newsletter service
The first column of the spreadsheet will list these marketing channels. The next column will provide a description of each tool (e.g. name of service provider; cost per month). Next, provide a column for each fiscal quarter. Dividing the year into fiscal quarters can help you see where you’re over or under budget in a timely manner, allowing you to make changes accordingly into the future.
Some quarters may have larger budgets than others, especially if you increase marketing and sales during specific seasons (e.g. Valentine’s Day, winter holidays). Don’t forget to leave a little wiggle room so you don’t end up over budget!
Assessing Your Budget for Next Year
Throughout the year, pay attention to each of your marketing channels and its results. If you launched a social media campaign that cost you $10,000 but only brought in $3,000 in new sales, you probably should reduce your social media spend for next year. On the other hand, if a trade show cost you $50,000 but brought you more brand recognition than sales, you might decide to go back to the show next year. Measuring direct sales is much easier than measuring brand awareness, though the two are equally important.
The tools that provide the biggest bang for your buck should be replicated and increased accordingly. And don’t be afraid to change both your marketing plan and budget every year — if not more frequently. After all, with Internet technology bringing us more exciting ways to market a business every day, you have to make room for change. After all, your competitors certainly will!