The new year is well underway, and many businesses are finding their stride and moving toward business growth in 2018. We hope many of you took our advice and set aside some time last year to map out goals for your own business. Even if you didn’t get around to it, however, there is still value in putting together a game plan to help you see success this year. And one aspect that all business owners should contemplate at some point is deciding how much to dedicate to marketing, in regard to both time and money. This can be a gray area for many business owners, especially those who have new companies and are trying to establish themselves. Even veteran business owners can have questions when it comes to figuring out the most effective areas in which to invest within a changing marketing landscape.
We’ve prepared a guide with some helpful considerations for all business owners. Our goal is to provide you with an understanding of what should be addressed and where marketing looks to be heading in the next few years. This can hopefully leave you with a strong jumping off point as you make your decisions about your business marketing in 2018.
Working Out the Numbers
There are many resources available to help business owners figure out how much to allocate to marketing. Perhaps one of the most helpful tools to utilize is a budget calculator. There are several available on business and financial websites. Additionally, if you have access to a financial advisor or an accountant, they should also be able to help you.
In order to get the most useful estimates when calculating your budget, there are some pieces of information you’ll need to input. The most important that you’ll need to know will be your business’s annual revenue. After all, you need to know the parameters your budget must fall within in order to create a sustainable plan. Additional pieces of information that will also factor into calculations include your type of business/industry, the size of your company, and how much of your annual revenue is generated online vs. traditional avenues (print, direct mail, broadcast, etc.). It can also be very helpful to have an idea of how much growth you’d like to aim for over the next year. For example, perhaps you currently offer your services locally, but are looking to expand further. It will be vital to factor into your budget whatever amount you’d like to scale up.
Growth vs. Marketing
Any amount that you determine will likely vary based on how established your company is. If you have a newer business and are hoping to gain clientele, to not only help you stay afloat but also see growth, consider dedicating 12-20% of your gross revenue to marketing. This may seem like a lot, but keep in mind what you’re trying to achieve. After all, you may have an excellent product or service, but without regular customers and a loyal following, it doesn’t do any good. Thus, it stands that a heavier investment in marketing will help ensure that your brand gets the visibility it needs. Without it, you run the risk of losing any opportunity to gain the reputation needed for sustainability. For businesses that have been around longer (ideally exceeding five years), an allocation of 6-12% of gross revenue should be substantial in maintaining a healthy marketing campaign. Unless you need to account for a major shift in some area (requiring a big push to help alleviate financial stress), as long as you have a reasonable amount of loyal customers, marketing efforts don’t need to be as extensive as those for a new company.
Time is Money
With regard to budgeting time for marketing efforts, much of this will again be determined by the size of your business. If you are a newer company, it’s more likely that you are working with a smaller staff. You may even be carrying the load entirely by yourself. In this case, most of the marketing responsibilities will likely fall on your plate. Consider everything else you must manage and figure out what makes sense for your overall plan. If you have limited bandwidth to dedicate to marketing tasks but you need to see substantial growth (thus requiring a certain amount of exposure), perhaps it would be best to outsource certain items. Larger and more established companies with available funds may be able to create a position, or maybe even an entire team focused on marketing, with time allocated specifically to addressing campaign tasks.
Important Budget Considerations
Before we close, it’s crucial to note that every business is different. There is no “magic number” for any and every business with regard to marketing budgets. From how they function, to specific needs, to goals and timelines, the characteristics for business owners to consider are varied and nuanced. It comes down to this: you know your business best and even with guidance, the final call in how to work towards growth will be up to you. The details we’ve covered will hopefully serve as a handbook of sorts as you create a game plan and put it into action.
Addressing Marketing Needs and More
Is this the year you’re hoping to see a jump in business growth? Do you have a growing list of goals that you want to achieve in the coming months? We’re here to help with all of your marketing needs, from building a greater online presence to revamping your business website. Our expertise and experience allows for your ideas to become reality—without all of the extra legwork falling completely on your shoulders. Together, we can make 2018 the year that your business flourishes. Contact us today to set up a consultation.