Coming up with a dollar amount that you are comfortable spending is just small component of the budgeting process. You'll also need to determine where those dollars are best invested.
Phil Rodriguez, the owner of Vista Window Manufacturing in Monrovia, California states, "During the last quarter when the holidays are "disrupting" normal business is the perfect time for creating the marketing plan for the new year. Hope to succeed and grow your business in 2013? Unfortunately "Hope" is not a plan. Our strategy for success in 2013 is to first revisit our marketing plan for 2012. We determine what worked best, what was marginal, where we are we underserved? Having a snapshot looking backward is critical for developing the plan for looking forward.
For us, we create a hard plan for the first six months and a soft plan for the remaining six. We start with our budget amount, which is approximately 5% of next years projected gross sales. Then we look at our current advertising mediums and lay out our plan month by month. This is a tremendous amount of upfront work, but it alleviates a lot of stress and work in the future so I can focus on selling and running my company. I liken it to having my marketing plan running on autopilot with just tweaks to be done as the month's progress to further tighten the controls."
Here are a few tips on how to build a marketing budget for the new year and where to allocate your funds.
How much should I spend?
Many marketing experts agree that you should spend between 1% to 10% percent of your sales, or possibly more depending on several factors, including:
1. How established is your business? If you are a startup or nobody knows about your company, you should probably spend more.
2. What industry are you in? You should research how much your competition is spending and where they are spending on advertising.
3. How much can you really afford? This is one of the biggest obstacles that businesses face. This is a key component that can make or break a business.
It used to be that businesses concentrated their marketing efforts exclusively on traditional media – like print ads, TV and radio commercials, direct mail, and glossy brochures. Then the Internet happened and social media changed the Internet.
Recent reports by a small business market research firm gathered information from over 900 businesses with less than 100 employees.
Here are some of the key facts:
- 50% of the businesses with less than $1,000 for the marketing budget used social networks such as Facebook, Twitter and Linkedin.
- 40% are spending more than 20% of their marketing budgets on websites.
- Businesses are planning to increase spending next year on these budget areas: website, E-mail marketing, direct mail and print advertising.
Still not too sure what advertising medium to invest your money. Contact our Marketing Specialist for a free consultation at 626-549-1294.