Budget For Marketing
I’ve owned/operated 2 businesses for the past 10 years. The first business was a Refrigeration Service. My husband and I ran that business together for 7 years. It was our sole source of income. I handled all the financial aspects of the business, he handled the service end.
For the past several years, I have co-owned and operated The Write Market. This business provides supplementary income for myself and my partner (Terry Kent). Both of us have shared the budgeting tasks of our business.
If you own a small business, the topic of “budget” or “finances” weaves in and out of every area of your life. Mary’s article above, talks a good deal about how her business affects her family life. Mary’s principles of frugality work in both life and in business.
Before you develop your budget, you must have goals. Your profit goals will be a primary influence on your budget. If your goal is to earn $4.00 a day or $500 a day, the same rules apply. You will need to make a certain amount in order to cover expenses and profit.
Part of your expenses should be delegated to marketing. Marketing will bring in sales.
The amount that you specify for marketing will depend on your business goals and the type of business that you own. If you have an established business, you may be able to spend less on advertising and marketing. If you have a new business, you may need to lay out more money in order to get your business noticed.
You will need to consider ROI or Return on Investment. You invest a certain amount into marketing and you need to get a return on that amount. The return that you need will be dictated by your financial goals. The return that you get will be dictated by the economy, by where you place the ad, by the wording of the ad, and a myriad of other influences.
Do your homework before placing an ad or doing any type of marketing. I cannot give specific advice in this area; how much you spend on advertising and where you choose to advertise will be specific to your business, your markets, your goals, and your willingness to take risks.
When we first bought the Refrigeration Service, we spent a good deal of money on advertising in the yellow pages. (It was about $600 per month.) This is the only form of advertising that we used. We chose this type of advertising based on the experience of other people in the industry. We examined our target market and where they would look to find our services. In other words, we did our homework on it.
However, after two years of this intense and expensive advertising, we pulled the large yellow page ad because we had developed a steadier client and referral base. At this point, we chose a less expensive and smaller yellow page ad.
Our marketing budget for The Write Market, is quite different. This is a web business and we decided that the only money we would spend on advertising would be on the internet. Our advertising budget for The Write Market is approximately $50 per month. However, we delegate our “time” each week to making contacts or writing articles or other “free” forms of advertising. (I put the word “free” in quotes, because it’s not really free; time is money.)
Part of our philosophy for The Write Market has been to only spend what we’ve earned. (There were start up costs, but other than that we have never gone into debt or spent a penny more than we’ve made.)
We all cringe when we see the word “Budget.” However, if you think of your budget as being the key factor in achieving your “Financial Goals,” it really gives the word a little more respect. By putting your financial goals down on paper, it makes them more realistic and you can see if you are making your money work to its best advantage.