First of all let’s get one myth out of the way: There’s no such thing as a magic formula for working out your marketing budget.
If you do a search for marketing budget online you’ll find a lot of different ideas about how to figure it out: everything from a percentage of sales (and the actual percentage recommended varies wildly) to a percentage increase on last year’s marketing budget or simply a figure that sits well with your gut.
If you’ve been in business for a year or more (or even a few months), take a long hard look at your marketing efforts up to now. Make a list of everything you’ve done, together with the costs involved, and the results of each item.
If you’re like most small businesses, you can’t pinpoint your marketing results for the most part. It’s tough to admit that, but it’s a reality for most of my clients, and many others in business. You spend money from a mostly non-existent marketing budget and then you don’t know whether you spent that money wisely.
So as a first stage for doing better, look back to last year and see what you spent your money on. To help you jog your memory here’s a list of possibly marketing expenses. It’s not meant to be fully comprehensive, so just use it as a guideline.
What I Spent My Marketing Budget On
- newspaper advertising
- directory advertising
- business conferences
- flyers
- giveaway promotional items
- special offers
- price discounts
- advertorials
- brochures
- website
- newsletters
- graphics
- copywriting
- special events
- loyalty programs
- referral programs
- customer service
- market research
- packaging
- distribution
- publicity
- public relations
- trade shows
- marketing education
Write down information about each expense using the following headings:
- What I Bought
- How Much I Paid
- How Much I Made
I’ll cover what to do with your new-found information, and how to approach a marketing budget for a new business in Part 2.
