It is a fine line of numbers and percentages when it comes to big business marketing. There are whole departments and contracted-out companies that determine how much you should spend and on what. When it comes to small businesses, however, the lines are blurred and not everyone is clear on how to proceed. Here are some tips on how much you should be spending on marketing your brand and what could work for you.
Spending ten percent or twenty percent of your revenue on selling your business can really seem like a lot. That’s why a marketing plan is so important! Say, you hope to acquire 10 new customers or clients in the next six months. That isn’t to some companies a lofty goal, and will vary depending on your business, but setting something realistic can only help your confidence getting your business’ name out there. So, what will it take to get those 10 new clients? Do you need to put out a Craigslist ad? Or maybe boost your posts on Facebook? There are millions of ways to acquire customers and it will depend on your marketing budget and target audience. If you are starting off with a low profit margin, then your budget will reflect that. That’s okay! In this technologically-advanced world, marketing doesn’t have to cost you an arm and a leg. By targeting smaller markets, like specific industries or local businesses, your spending will be smaller as well.
Don’t forget to check out the competition! If your competitors are spending big bucks on marketing then you should redirect your spending accordingly. I’m not suggesting dollar-for-dollar but it is helpful to be aware. Also, this will give you a clearer picture on what works for them and could help your business too. You don’t necessarily want to advertise the same way but it doesn’t hurt be aware of anything that can help your business’ revenue.
Most businesses like concrete numbers that they can see. If a business made $200,000 dollars last year and their marketing budget is 5%, then they will spend $10,000 on marketing their business. While numbers are nice to look at and might make you feel nice and cozy, but they aren’t going to show if you are spending too little or too much. Sure, the results might but do you really want to wait that long to have your marketing plan fail? Most businesses spend 1% to 15% of their sales on marketing. This is a huge range and really can’t help you since your business could have little sales or sales in the millions. Do you want to spend hundreds of thousands of dollars on advertising? That seems a little unnecessary. That is where your marketing budget comes into play. Knowing your brand and demographic can really help focus your money where it should go and where it will be most beneficial to increasing your profit margin!
It’s very easy to just take advice from a couple of friends on what marketing techniques happened to work for them. Honestly, you need a marketing plan. It’s just true. It doesn’t have to be a re-branding, necessarily, but you do need to have an outline and do some research. If you don’t have the time for this, that is a good thing! It means that you are too busy with work and making money which is the point, right? You can always choose to hire a marketing consultant or social media manager that is trained in digital marketing. Take your business by the reigns and put it out into the universe. You don’t have to have a million dollar business to afford a marketing consultant and even finding someone new in the industry can perhaps cut you a deal. Whether you take this on yourself or hire help, you will be surprised at the feedback you get and the proposed revenue that can break through the self-constructed glass ceiling. Remember, good marketing doesn’t put your business “in the red.” Make sure that your spending is smart and directly correlated to your small business.