Without marketing of some kind – even if it’s just word of mouth – most businesses and freelancers wouldn’t survive. But marketing costs money. So do you work out just how much money to spend? And what do you do with it?
Many businesses and freelancers approach marketing in quite an ad-hoc way- trying out different avenues and taking opportunities as they come, seeing what works and what doesn’t.
But to ensure your marketing works as effectively as possible, it’s essential you know where every penny is going – and what you want it to achieve. Because when it comes to marketing, this quote has never been more apt:
“If you fail to plan, you plan to fail.”
You see, spent well, your marketing budget is a fantastic, essential investment in growing your sales and business. But fritter it away in a scatter-gun approach in random places, and unless you’re very lucky (and ‘luck’ isn’t the most reliable business strategy!), it’s just a waste.
So how can you make your marketing budget work for you? What kind of plans should you be making? Marketing consultant Nicole Martin explains.
You’re not alone if you’re struggling
Don’t worry if you’re struggling to work out where to spend your marketing budget. “How do I get the most from my marketing budget?” is a question most businesses ask themselves – and as a small or medium-sized business with a budget to match, it’s even more essential that you don’t waste money in the wrong areas.
It’s not that hard to find helpful guides and tips suggesting ways to manage your budgets and make financial decisions, but it’s much trickier trying to pinpoint a definitive strategy for spending your marketing money wisely.
Why it’s important to have a budget
Probably the first place to start is by actually having a marketing budget. Even in a tough economic market, or if you’re struggling to keep up with current demand for your products or services, you should assign a proportion of your overall business budget for marketing.
Why? Because in a tough market, with fewer customers to go round in your niche, you need a bigger piece of the pie. And in abundant times, when you have more than enough clients and customers, you should be planning ahead for quieter days… or you could find your current, seemingly endless stream of customers drying up.
A set marketing budget can also help you by:
- Enabling you to make better and more informed decisions on what to spend on, when and why.
- Giving you a greater ability to make continual improvements and anticipate problems.
- Giving you sound financial information to base decisions on.
- Improving your clarity and focus.
How to work out your marketing budget
So how can you work out just how much you have to spend on marketing? There are a number of approaches you can take in working out your marketing budget:
- Historical – basing your current allowance on your previous previous budgets and costs.
- Zero-based – start with a zero budget and analyse each opportunity as it arises before making a decision on it.
- Activity-related – look at your activities, the costs and the resulting ROI and deciding.
- Fixed – choose a figure and stick to it.
- Sales vs spend – look at your income versus expenditure and work out how much you can assign.
What kind of activities could your budget cover?
Once you’ve identified your budget, you then need to consider what activities you want to spend it on, or spread it between. These can include:
- Sales promotions
- Personal selling
- Direct mail
- Online marketing
- Cold calling
- Others such as merchandise and branding
Keep a keen eye on your budget
Of course, simply agreeing a marketing budget and identifying where you will spend it is just the start. To ensure you continue to spend your money as wisely as possible you need to keep a keen eye on it.
It’s important to make sure you stick closely to your budget. A few pounds over here and there can quickly add up to a lot of extra money – and you don’t want to run out of money too soon. For this reason it’s good to give your budget and activities a thorough review after six months. If you need to, you can then do a new forecast.
It’s also wise to look through your previous monthly and annual accounts. What do you spend a lot of money on? Is there a way you can save money and achieve similar results? Can you save money elsewhere in your business to increase your marketing budget?
Buy wisely – but don’t be cheap
While economising is always important (spending more than you need to is never a good business strategy) beware of making false economies.
By all means shop around for cheaper suppliers or service providers, buy in bulk where you can, and negotiate for the best price possible, but never compromise on quality or lower your standards – for example by using card that is thin and cheap-looking, or using a less-skilled designer.
There are some places where spending a bit more money is a wise investment, and certainly for branding, design and printing it’s worth seeking out proper professionals, even if they do cost a bit more. In the end your investment will pay off.
Outsource if you need to
In fact it’s important to think of marketing an investment, not a cost. So if you need to spend a bit of money to get what you want, and that money will eventually lead to greater sales and awareness, then it’s worth it.
Many small business owners and freelancers are used to wearing many hats in their work – from teagirl to boss, bookkeeper and even cleaner. But often there are key areas that you are most skilled at, and that bring the biggest benefits to your business.
If they don’t include marketing and branding, and your budget can cover it, you may want to consider outsourcing them to professionals – a company or freelancers, even just on an hourly basis. This ensures your marketing budget is in the best possible hands, while you’re free to spend your time focusing on what you do best for your business.
Start planning to succeed today
If you haven’t already done so, think about your marketing plans today. Have you set out a budget yet? And if so, is it working for you? What changes can you make to ensure it works harder for you? What mistakes can you avoid?
With a clear direction and some simple budgeting and planning, you’ll find it much easier to create and implement a successful marketing strategy and get closer to your business and freelance goals.Nicole Martin