Startup founders often focus a healthy portion of their budget on marketing so they can grow their client base. They set aside funds for things like billboards, magazine ads, trade show booths, sponsorships, and paid social media posts.
Between the thrill of launching new promotional initiatives and the routine of repeat marketing campaigns, founders and management teams have an underlying assumption that their advertising dollars are being spent wisely. However, this may be a misconception about how marketing works. Some small business owners place blind trust in marketing campaigns that produce an unknown return on investment (ROI).
It’s easy for well-intentioned entrepreneurs to arbitrarily allocate some of their earnings toward marketing. However, marketing spend is best done with a lean and concrete marketing strategy and a budget based on that strategy. With these pieces in place, money put toward your marketing efforts will increase your growth and long-term potential, and will provide a better-documented ROI.
To strategically grow your business, create and formalize your small business marketing budget while also keeping each ad dollar accountable for driving sales and profits. You may ask fundamental questions, such as:
- What is a good marketing budget for a small business?
- What percentage should a marketing budget be for a small business?
This will help minimize waste and establish a healthy marketing budget for a small business like yours.
This article will help you figure out how to create a marketing budget for your small business. To answer these questions and start budgeting correctly, you need to take multiple steps:
- Evaluate your current marketing efforts.
- Consider how other companies in your industry advertise and spend their marketing budgets.
- Experiment, evaluate, and scale your campaigns.
- Investigate how your marketing spend affects the rest of your budget.
The following tips will set you up to create a better small business marketing budget for your company’s needs.