A lot of small business owners understand the power of marketing to bring in new business, but the thought of creating a yearly marketing budget and sticking to it brings tears to their eyes. When planning finances for the year, one of the areas that doesn’t get enough attention is a smart, strategic marketing budget that makes sense for the business. Many small businesses will use what’s left over, or spend money on the fly for their marketing. There is a better way.
Marketing is powerful, and business owners understand that. According to an Intuit survey of small business owners, in the hypothetical situation of receiving an $5,000 for their company, the top choice of small business owners (27%) was spending the money on marketing materials. Furthermore, this hypothetical $5,000 coming in to the business would seriously help 80% of the respondents who said it would help with their business in some way. 47% of the small businesses polled said that this money would significantly help or save the business, while only 20% said it would have little or no impact. Most small businesses are still recovering from the recession years, and this shows in their marketing spend.
Most small business owners have a very small marketing budget, with about 67% of businesses spending just over $2,000 a year on marketing. This relatively small amount has to be spent wisely. Instead of spending only what’s left over after everything else is paid for, it’s important to plan and budget money strategically to bring in new business and more money.
Here are a few of the most popular marketing budget approaches:
- Simple Dollar Approach
- Percent of Sales
- Match Competitor Spend
- Marketing Plan Objective
One budget does not fit all, it’s up to the business owner to decide which one is best for their business, their budget, and their marketing goals. Each marketing budget plan has its different levels of difficulty while implementing and effectiveness once implemented, as well as its own set of pros and cons.
What to do next, if you’re a small business owner that wants to plan a smart marketing budget for the new year? Choose wisely. The Small Business Marketing Budgets infographic breaks down what the current climate is for small business owners and how they’re dealing with their own marketing budgets and finances. The infographic also lays out four popular budgeting styles to get your small business to allocate the best amount of money on marketing for 2014.