Last week we wrote about sitting down and prioritizing a marketing plan.
Now we turn to the financial aspect. For a marketing strategy to work, there must be cohesion between the marketing strategy and the finances allocated to it.
Breakdown of revenue and marketing budget
There are many different estimates of how big the marketing budget should be. And it also depends on the market you're in, whether it's to grow or to maintain your market share. Likewise, whether you are in a market with many competitors or whether you have a monopoly and are the sole provider of your product.
If you're a start-up, costs will typically be slightly higher than for a well-established business. Typically, this is because a startup needs to establish its name and attract its first customers, as well as its core group of returning customers.
Many experts believe that the marketing budget for a startup company should be between 5 and 9% of the company's gross revenue. However, studies show that actual marketing budgets range from 10% to 25% of company profits.
What does a marketing budget include
When you look at companies' marketing budgets, they can seem large if you don't look into what they are covered by.
A marketing budget typically includes:
A wide range of advertising, both online and offline. This includes everything from banners and ads on buses, 3rd party websites, magazines and TV, to entire newspapers.
If the company participates in trade shows or conferences, this is also part of the marketing budget, as well as if the company organizes competitions.
Last but not least, PR and press releases are also an important part of the marketing budget.
If there is a website to maintain, it will typically also be budgeted under marketing.
When setting the budget, it can be divided into 2 categories, production and distribution. Production is, among other things, if graphic designers are needed to put up a banner or an advertisement. Distribution is everything from the distribution of printed media to which third-party websites you want an advertising banner on. What you put in Facebook advertising, for example, will also fall under distribution.
How long does it take to make
A marketing budget and strategy can vary in appearance, size and complexity. From a simple one that may only take a single meeting with a few marketing managers, to multiple meetings spread over a few months with several employees and departments.
Once the entire budget is set and the marketing strategy is in place, it's important to have recaps throughout the year or period. To make sure the budget is on track, but also to check that the things you might be testing and trying out are working. There's no point throwing money at the same model over and over again if it doesn't work, and if something works surprisingly well, it might be worth looking at scaling it up.
If you don't have a lot of marketing experience, it's a good idea to start simple. Start by writing down the things you want to do and be realistic about how much time you have, then prioritize them and where you want to spend your money. This way, you'll create a plan that works with your budget
Fund the kick-start of your marketing strategy
It can be hard to get started with the chrome-plated marketing strategy, there are a lot of guides online. So look and be critical for something you believe in.
If you need capital to kick-start a campaign, Qred is here to help. You can apply for a loan to do just that here!