There is no escaping the old adage “It takes money to make money.” Yet, we've all heard self-made entrepreneurs proclaim that they started their business without two pennies to rub together. This may be true, but it's important to note that they did not achieve success without valuable resources, such as time, skill, and talent. In reality, it takes something of value to make money, but frankly that doesn’t have quite the same ring to it.
One way to make the most of those resources for the best return on your investment is establishing a solid marketing budget. Determining a marketing budget can be intimidating, and for business owners, there is often hesitation surrounding it: I don’t know how much I need, I don’t what works and what doesn’t, I don’t know where to spend my budget, or if I can afford a budget. The first thing to realize is that as a business owner, you've likely already spent money on marketing, but haven't considered it part of a "budget" because they weren't planned or evaluated purchases. It's common for business owners to buy marketing materials and advertising on a whim, or when they're looking for that magic bullet that's going to bring hordes of new customers to their door. Unfortunately, marketing doesn't work this way — at least not in the long run.
In order for a marketing budget to yield results, a marketing strategy is needed — without one, there is no way to determine the effectiveness of your tactics. One of the most crucial actions a business can take is reviewing the previous year’s marketing and examining what worked for them. Take a look at how you marketed your business, where you spent your marketing dollars (and if not your dollars, then your other valuable assets, such as time, and skill) last year and decide if it benefited your business and ultimately increased your bottom line. Without a marketing budget "plan" you can often over spend in areas that are doing nothing for your business, or, under spend in areas that will help your business grow.
The truth of it is that you are never too small for a marketing budget because setting a marketing budget sets a tone for your business. Outwardly, it demonstrates your ability to generate, and implement, a strategy. Inwardly, it offers you control over your business: you are conscious of your spending, aware of what is and isn’t working, and are receiving an outcome for the investment you’re making.
Once the need has been established, the next question is most often “Where do I start?” I suggest at the beginning: understanding your market. In a step back to grammar school, you’ll need to answer the six 6 W’s: who, what, where, when, why, and how. Once you have a firm grasp of your audience, it's easier to determine how to reach them and what resources you’ll need to help make it happen.
Now I know at least one person reading this has thought, yeah, but what about just doing my own social media? Remember, there is no free marketing; it's going to cost you both time and money. The result of a business doing all their own social media is often the business owner devoting their time and resources focused on something other than actually providing the services or products offered, which at best is a time-waster, and at worst can actually damage your brand, and hinder business growth. The unfortunate reality is many businesses think that a few posts every week with special offers and cool Instagram photos will bring customers crashing down their doors. I’ll admit, there are some useful, and often free, online tools and apps that can help to connect you to your community, however, social media is simply a tactic when used in isolation and not part of a larger marketing strategy.
Admittedly, social media has changed the way we think about marketing our businesses and where we spend our marketing dollars. More frequently business owners refuse to budget for a marketing strategy, and instead pay for tactic after tactic with very little or no actual return. At worst, this results in lost revenue because business owners don’t understand how to connect with their audience. At best, businesses may start to see a return on their efforts, but many take a shotgun approach rather than monitoring the return on their efforts and lose the opportunity to incorporate those results into a long-term brand strategy.
At some point down the line, business owners come to realize they need to hire someone to write compelling content on a weekly, if not daily basis. The cost of hiring a marketing professional should be planned in advance, and incorporated into the marketing budget. To determine what amount to budget, you’ll have to examine what it has already cost you to market your business. If you've been in business for at least a couple of years, you've most likely already purchased advertising or other marketing. The question to ask yourself now, is whether it's part of a larger strategy, just something that you've always done, or worse, something you’ve done with fingers crossed hoping it will work. Once you've determined what your marketing budget has been, consider how much you are willing to invest to see results. Because truly, that's what hiring a marketing professional is: an investment in someone else's talent, skill and time to help grow your business.
Carl Designs expert brand communications design.