Category Archives: Marketing Budget Tips
I entered a contest recently and the grand prize is $20,000. One of the entry requirements is that you have to describe how you would spend the money on your small business.
Wow. The mind reels! Can you imagine?
So, let’s say $20,000 fell in your lap, and you had to spend it on your business over the course of, let’s say, a year. How would you spend it? This was actually a good exercise in thinking about safety and risk. Would you try some things that you weren’t sure would work? I would.
Here’s how I would spend my $20,000…
- $5,000 for equipment replacement and updates (new video lights, software, digital camera, etc.)
- $3,000 for targeted direct mail campaign (e.g., post card campaigns)
- $2,500 for a series of display advertisements targeting small businesses and nonprofits in community newspapers
- $2,500 to invest in search engine marketing (this is new; we have not tried this before)
- $1,500 for professional memberships (AMA, PRSA, WWPR, IABC, IPRA) and Chamber of Commerce membership
- $1,500 for one high-visibility sponsorship & exhibit opportunity in the communications community (because we subcontract to other firms and consultants)
- $1,000 for printing brochures, signage, and marketing collateral
- $1,000 for Facebook advertising
- $1,000 to attend professional development and networking events
- $1,000 for incidentals – and by incidentals, you know I mean a knock-out dress that makes me feel super-confident in client meetings — greeting cards & thank you gifts, etc.
But now that I think about it, I could have also hired an intern…or purchased an incredible video camera…or even rented meeting space for a seminar series I’ve been dreaming about. So many choices! What would you spend your play money on?
If you enter and do win, I’m counting on you to use some of your $20,000 to take me to lunch for telling you about the contest!
Before you know it, 2009 will be a memory. If you haven’t done so already, now is the time to develop your marketing and public relations plans for 2010, and that means setting a budget. But where to start?
Every situation is different, but it can be helpful to have some general guidelines on what is commonly done, then adjust to your needs.
First, let’s talk about your marketing budget: the money you will set aside to spend on email marketing, advertising, direct mail, social media, and collateral materials, such as brochures. To determine how much you should be spending on marketing for your business, take 10% of your gross sales (last year’s or this year’s projected sales) and spend that amount on marketing in 201o. If that figure is uncomfortably high for your small to medium-sized business, pare it down to 7% or 8%. However, if you have a storefront business (with expensive rent), you can spend less on marketing, e.g., 5% to 7%. Going any less than 5% isn’t recommended, especially in this economy, and particularly if your business is less than five years old. Another tip is to check out what your competitors are doing in terms of marketing.
If you are calculating a budget for a nonprofit organization with a mission that involves substantial educational outreach, you can go higher, allocating a percentage of your total budget for marketing in the teen percents, but keep it under 20% of your total annual budget. If that outreach is less important, go as low at 5% to 8% of your total annual budget.
Planning a budget for a special event? Don’t skimp on marketing. Use 10% of your revenues to market the value of the event to your target audiences with high quality, professionally designed direct mail invitations and announcements, first class postage, branded social media, and classy email promotions.
What about your public relations budget? Take 1% of your gross sales (or annual budget) and dedicate that amount to public relations efforts. Use this amount on online press releases, media relations, monitoring, blogs, newsletters, podcasts, community outreach, and sponsorships.