How to draft a quick marketing budget

Written on the 4 September 2012 by Snap Marketing

The more effective your budget, the greater your profit potential

The rule of thumb for marketing budgets is to set aside anywhere from 1 to 10 percent of sales to spend on marketing per year. However, this figure could be higher when taking other factors into consideration. These include:

How well established your business is: If your brand isn't well known and people haven't heard of it, you should allocate a higher marketing spend.

The industry you're in: Get an estimate of how much your competitors are spending and see how you compare.

Your overheads: How much do you have left to spend after overheads like rent, staffing, insurance, bills etc?

What you can afford: There's no point sending yourself into unnecessary debt.

The reality for many small businesses is that they just don't have deep enough pockets to dip into. So they must make every dollar in their limited marketing budgets work for them. This can be achieved by choosing the best medium with the most exposure. But take these budget tips on board too:

1. Go online
The internet may help you get the biggest bang for your buck, since it offers a range of highly effective, low cost marketing opportunities.

2. Budget
Set a reasonable budget and stick to it. It's helpful to divide this budget by dedicating portions to different promotional tools. Review each sub-budget every month to check performance levels. If you're not getting a decent return, cut back so you're not wasting funds.

3. Say no
Learn to say no to anything extra that exceeds your marketing budget. If an advertiser phones you offering a last minute deal, politely reject the offer since it's not included in your pre-set budget.

4. Use free tools
Free online tools are a fast and effective way to assess the opinions and preferences of your customer base. The Facebook Opinion Poll application in particular allows business owners to create polls on their corporate Facebook page to get a better understanding of the people interested in their products and services.

5. Negotiate
Business owners can shave hundreds off their marketing expenses by bartering and asking for discounts from advertisers. A savvy tactic is to ask for a frequency discount if you're always buying a certain amount of advertising from one provider. Some businesses also have the advantage of offering free products and services in return for reduced advertising rates.