Do you love your marketing budget?
I find people fall into two extremes when it comes to money (and marketing budgets). A small percentage of people are all over it, accounting for every cent and track it religiously.
But the majority of people would rather stab themselves in the eye than work out what’s happening with their money. It’s common for tax returns to be put on the back-burner. Multiple Super Accounts exist. Bank accounts stay the same. And often, paying too much for services because we can’t be bothered to shop around.
So it’s no surprise many business owners feel the same way about marketing budgets and getting involved with their numbers. But like a pesky call from the ATO, the numbers have a habit of catching up with you if you ignore them for too long.
Show your marketing budget some love.
The best businesses love their numbers and their marketing budget. Because they know if you ignore the numbers and spend spend spend, then the profit numbers will go down down down.
How much should I spend on marketing?, is often the first question I’m asked. My answer is always, it depends. Let’s explore why.
- What do you want your business to do for you?
- What can your business afford?
- How much revenue do you earn?
- How much does it cost to get a new customer?
- How much time can you dedicate to marketing?
These questions are often met with blank faces and an um…. I don’t know. This makes it pretty hard to advise how much you should be spending.
You see, just like your own budget, there’s no point in setting a budget unless you’re armed with all the facts. Otherwise, you’ll overspend, get in debt, and stress yourself out.
Who wants to be that business owner? Not me. And if you’re reading this, I’m guessing not you either.
Your budget can be as simple as ‘What’s coming in, what’s going out, and what’s left over’.
From the what is left over pile you can work out a percentage that you’re willing to pay for marketing (between 1 & 10% on average).
Your marketing spend will depend on where your business is at but at a minimum consider this:
- What are your business goals? What marketing goals line up beneath them?
- How much revenue would you expect to generate?
- What would be an acceptable Return on Investment for you?
- How much of that revenue is profit that can be used in marketing?
- How will you measure your activity and results?
- Can you afford a marketing budget?
- Can you afford not to have a marketing budget?
When you start out the answer to your budget question may be quite small, but don’t get disheartened. As you start to become more focused on your numbers you’ll be surprised at how quickly they grow. And, that will include your profit.
Need help with your numbers or marketing? Talk to me, your local Wareemba (yep, that’s in Sydney), Marketing Expert.