How much of my money should I allocate toward marketing my business?
There is no one single definitive answer to this question but we’ll explore several ideas that we hope will help you have a better understanding in the decision making process of your business when it comes to marketing your business.
Taking an educated guess at answering this question we believe you should allocate 50-70 percent of your overall budget toward marketing. Can this guess be disproved? Possibly but It depends on the business you’re in and who your audience is. It can also depend on timing and chance. Other businesses in your industry are spending money toward marketing so it’s imperative that you do too. How else is your audience going to become aware of your product/service.
Do you need to run a heavy marketing campaign when your audience is a government entity? Probably not but you’ll need funds to set up business meetings to meet the people you need to accomplish the goal of securing a contract.
If your audience involves a group of people say the American people you’ll need a way or several ways to reach your audience in an effective and efficient manner. Proven ways are TV (Local, Cable, Satellite, Internet), Radio (Local and Internet), Print (Local and digital via Internet), Social Media (Twitter, Facebook, Instagram, etc.), Internet (SEO,PPC, SEM), and word of mouth (dates back before you and I were born). Some people can tell you they’ve done we’ll with little to no advertising but we’re willing to wager their way isn’t logical for everyone. Another variable that can be considered in their success could be their location, it could be ideal for the product/service they’re selling. Let’s consider a gas station or convince store as an example, they don’t need to do heavy advertising because people identify almost instantly with what services they most likely offer…. Gas, milk, lotto tickets, etc.
They need to get to know you
Your business on the other hand may be a business to business service or you might be selling a new brand of product people have never heard of. This is where a marketing campaign must be considered and put into motion. Why? Because nobody has ever hear of you and people don’t buy products/services from brands they’ve never heard of. Marketing is simply the introduction of your business to the world. They need to get to know you and become familiar with your product/service. If you refuse to market business and your business is dependent on people don’t expect to grow and be around very long.
When it comes to operating your business how much of your operational budget is allocated toward marketing? Let’s pause for a second… do you have a budget? You know… helping your audience become aware of your product/service and creating the need to acquire it. Sure you need a business license, idea, and website but how do you plan on reaching your audience? Social media aka Word of mouth is an old school idea but new school due to the new methods for reaching your audience (Internet Marketing). I would say it’s safe to say in 2006-2008 social media was still developing. Today there are plenty of companies that would credit social media as instrumental to their business success. Does everyone need social media to succeed, no. It will depend on the goals and objective of your business. Sometimes social media can back fire if someone isn’t happy with your product/service.
How much did you pay for that website? Okay so let’s say you paid $1500 to build your website and it meets all your needs. The website is launched and you’re ready to start taking calls and filling orders. Have you launched your marketing campaign? Time goes by but the response has not been what you thought they would be. Your word of mouth campaign is going alright but how much money did you allocate to marketing your business? How many clients do you need to pay off the $1500 investment you spent for the website? Was that your commercial that just aired on TV during Scandal? How many clients do you need to pay off the cost for the business license with the county and state you’re doing business in? How many clients do you need to cover the cost for business rental space whether you
Inhabit a store front or you’re working from home? These factors will indeed depend on the kind of business you’re operating.
On a monthly basis how many clients do you need to sustain your operating costs (Internet, Phone, Electricity, Employment be it employee or contractor). These are questions you have to think on and figure out that ideal number and work toward meeting and exceeding that number. Let’s say you’re a builder…. How many clients do you need to pay off your loan and become profitable? You may need just one contract and that goal is not hard to attain. Are you thinking about the future? What about 5 years from now? Are you the kind of person that likes to be hands on or you like and know how to delegate responsibility to your employees or contractors? This is plenty to think about in a day’s time but you have to think your plan through. We’d enjoy talking with you about your business needs and marketing strategy to help you progress and become profitable in 2014. Until next time take care. MyBasicLLC