The first question you are going to ask about marketing budgets is: “Do I really need to spend money on my business marketing?” And the answer to that is unsurprisingly a very firm yes! Whatever the objectives set out in your business marketing plan, you are likely to need some money to achieve those things.
Even if you choose to run your entire business marketing through free social media channels (which I wouldn’t recommend by the way) you are likely to need to create original content. Great imagery and video content costs money. And you will want to link your social media to your website so you will need to spend some money on that. You may also want to invest in social media advertising.
Why do I need to set a marketing budget?
So why do you need to set a budget rather than spend as you go along? Firstly think about planning your cash flow. It’s really useful to have a good handle on what you want to spend on marketing so you plan to take action when you can afford it.
You may want to start some significant projects, for example you may be thinking about ongoing development of your website. These can be high cost items, so it’s useful to plan and budget for those. You may want to spread the costs over two financial years. Also if you are looking to run any kind of campaign in a year to promote a new product or take advantage of an opportunity setting a specific budget will help you evaluate how effective that campaign is.
How much should I spend on my marketing budget?
The next question I often get asked is “How much should I be spending?” This is a “how long is a piece of string” question! It will depend on the size of your business, the sector you are in, whether you are selling to businesses with a high lifetime value or small items to individual consumers. It will obviously depend on your turnover. I can’t recommend a specific amount or even a percentage. You might want to look back on what you spent last year and see how effective that was. But if you are starting from scratch and this is the first time you have set a marketing budget, let me go through some of the items you will want to include.
Budgeting for your website
Let’s start with the heart of your business marketing, your website. You may want to completely revamp your website this year in which case you need a one-off development and design cost. You may want to budget for copywriting and new photography. You will also need to include hosting and ongoing technical support. In so many website projects once the work is done and they are launched, the owner has no way of updating them and that is really not helpful. A website should be constantly updated. When you are budgeting for a website don’t just think about major changes, think also about the ongoing cost of maintaining that website.
Exhibition attendance and equipment
If you are in a business where going to exhibitions is a major part of your marketing strategy, you will need to ensure that display stands are up to date. You may also need to buy specific equipment for specific exhibitions so think about the equipment costs. Event attendance tends to be costly, so do budget carefully for all the different elements.
If you are developing your brand do invest some money in professional support to take you through that process. If your brand is new I recommend investing in brand photography. Even if you aren’t developing your brand I recommend an ongoing budget for photography, to include images of new people in your business. New product launches will need a photography budget, and existing products may need new imagery.
Tools and apps
Even if you are using free social media channels as a key part of your marketing plan, think about tools to help you make the most of the opportunities. You can invest in scheduling tools, tools to help you find great content or create video or design graphics. File sharing tools such as Dropbox are also invaluable. Digital marketing programmes may need investment in platforms such as Mailchimp or Kajabi. Podcasters may need to budget for hosting and editing costs.
All those tools and apps are helpful for marketing and can be low cost, but they all add up. Think about the practical tools you need day to day to deliver and set a realistic budget.
Training and memberships budget
If you find networking valuable, you can put in a cost for membership of networking organisations. You may want to put in a budget for one off training eg social media advertising or for a team member to undertake professional training such as Chartered Institute of Marketing. Professional fees can also come under this budget heading.
Are you going to need additional people to help you deliver your marketing? That might be overall marketing strategy support, several days a month to help you brainstorm ideas and set your general marketing direction. It might be practical hands on support with PR, social media or digital marketing. You can find consultants to help you with a few days of their time, or budget on a project by project basis. This is a really helpful approach if you don’t have the skills in your business.
Whatever your business does, social media advertising can be extremely useful. You can also set a budget for advertising in local magazines or newspapers, depending on what your business is and the audience you are trying attract. You can spend a lot of money on advertising so do think carefully about where you are placing your advertising and measure the return on investment.
Print and merchandise
Your requirements in this area will vary depending on your business. If you have premises do you need signage, merchandising, displays, posters or window displays? Do they need changing regularly? A consultancy business may need business cards, brochures and banner stands. You can get an unlimited assortment of promotional items and these should be tied to your marketing objectives.
With print, in my experience, don’t go for the cheapest printer you can find. Think about the service and quality you get from a printer when you are budgeting.
Do build in a contingency to help you respond to unexpected opportunities or to replace items that get damaged.
Managing your marketing budget
Once you have set the budget, it will need regular managing and reconciling. Typically I would look at the budget every month and check we’ve spent what we said we would spend.
Download my handy budget checklist here to help you plan and manage your marketing budget.
For more on this subject, you can listen to episode 9 of The Marketing Room podcast