Why You Can’t Afford NOT to Have a Marketing Budget
It eludes me why so many people put marketing last in their financial planning and budgeting. I understand that electricity and paying employees’ salaries is important, but establishing a marketing budget is just as important. Without it, you have no customers, so you don’t need electricity or employees!
I think entrepreneurs assume they need a star-dazzling six-digit marketing budget. Nothing could be further from the truth. To get started, when income isn’t yet rolling in, I suggest my clients allot just 10% of their revenues to marketing. As revenues increase, you can increase the amount or set a dollar amount.
When I started Egg almost a year ago, I had ZERO funds for marketing or anything else. I was so afraid my company wouldn’t make it without marketing money. But as soon as I committed to setting aside just 10% of my revenue, I slowly created a marketing pile of money that afforded me networking opportunities, small website advertising, and print collateral. These channels helped me build up Egg, and now my marketing budget has grown to meet my company’s growing success.
What goes into marketing budgets? It’s not just advertising:
Press release expenses (writing and distribution)
Marketing collateral (design, print, mail)
Website design and maintenance
Promotional items (notepads, stickers, pens)
Business cards, letterhead
If you have a solid marketing plan (future blog entry on that), the marketing budget should fall into place. You should know exactly what you’re spending your budget on, and when you’re doing it. You may want to have a budget for the month, quarter, and year.
And remember, it takes a while for results! Don’t spend $100 and expect to see your ROI in a week. It takes time and attentiveness. After 6 months, if one marketing tool isn’t working, consider swapping it out for another.