How Much Should I Budget for My Marketing?
One of the most commonly asked questions when discussing a website, multi-media production, or marketing campaign of any kind is…How much is it? For us, this is followed by “Depends on what you want. How much do you have budgeted?”
What we often hear is “I don’t have a budget in mind.” This is frequently the case with most small businesses in regards to all of their marketing and sales campaigns. It’s one of the few aspects in business that needs no budget but should happen just the same.
I wanted to blog about budgeting as part of the planning series, but wasn’t sure where to begin. Then Carolyn handed me an article in the Hartford Business Journal titled “How much should we spend on marketing?” According to the Small Business Administration, small businesses (under $5 million in annual revenues) should plan on spending 7% to 8% on a marketing budget. This means a $2 million business should be spending $160,000 annually, or just over $13,000 per month. Businesses that sell to a consumer base should be spending at least 17%.
As a marketing consultant, I may be kicked out of the club, but I must admit these numbers seem high to me. On the other hand, it’s a matter of determining how successful you want to be. Marketing is all about awareness. If your ideal customer isn’t aware you exist, it’s unlikely they will buy from you.
If you don’t currently have a marketing budget, start with small steps. Try 5% for a year. With a targeted marketing plan, you should see that investment pay for itself two or three times over in increased sales.
Photo credit: Philip Taylor PT http://flic.kr/p/bDwJ11