The key to keeping your business at the forefront of customers’ minds isn’t just focusing on providing great service. It’s also prioritizing your marketing and advertising efforts every quarter. And that means you’ll need to set a firm marketing budget.
The average advertising budget for a small business comes to roughly 1% of revenue each year. But since every small business is different, the amount you’ll need to spend may be larger.
Here’s how to set a clear business marketing budget so you can grow your company sustainably.
Establish Your Goals
Before you start thinking about how much money you want to allocate to your marketing and advertising budget, you need to set firm goals. Think about what you want your marketing efforts to achieve.
For example, if you want to expand into a new area or reach a broader customer base, you’ll need to spend more money. However, if you want to improve brand recognition or grow your business through word of mouth, you’ll likely be able to spend less.
Look at Your Business’s Expenses
The 1% rule is just a guideline. Before you can establish a budget, you need to have a clear picture of your business’s financial health. That means looking at how much you’re spending on general operations, how much money you’re earning, and where your unexpected costs lie.
Though you can do this by reviewing monthly paper statements, it’s easier to invest in bookkeeping and accounting software.
This software can help you view your company’s profits, losses, ongoing costs, and routine expenses. Once you have an idea of how much you’re bringing in and how much you’re spending, you’ll be better equipped to create a marketing budget that won’t strain your cash flow.
Figure Out Which Channels You Want to Pursue
Advertising doesn’t just mean making a commercial and airing it on television. It means relying on customers to give recommendations and leveraging social media and your website to make your business easy to find at a minimum.
You’re free to pursue as many marketing channels as you want, but each one will cost you a different amount.
Think about which types of marketing and advertising you want to use to grow your brand. Then, consider how much you’re willing to put into each type.
Setting an Advertising Budget for a Small Business Is Possible
If you’re trying to grow your brand, having a clear advertising budget for a small business is an absolute must. As long as you follow these tips, you’ll be able to create a functional marketing budget that will help you grow your brand without putting strain on your operating budget.
That said, investing in marketing is just the first step. You still need to know how to create effective strategies to catch both current and prospective customers’ attention.
Ready to take your marketing to the next level? Check out our latest posts for more tips.