1. Everyone else is doing it.
In her article, “How to Determine the Perfect Marketing Budget for Your Company” on Entrepreneur.com, Laurel Mintz talks about what is expected of you when it comes to branding, stating:
“There are certain unalienable marketing rights of passage that you must spend time and money on so you don’t miss the brand boat: Branding, Website, Social Media, Advertising, Content, and Events.”
2. Just because you build it, they won’t necessarily come.
Right away, you’ll need to spend money to tell the world your business exists and get them in the door! How much more likely are you to try out a new restaurant open in your neighborhood if they simply unlock the door and turn on the lights vs. if they send a coupon or flyer to you in the mail?
3. It’s a steep climb to brand awareness, and it never ends.
Consumers are bombarded with marketing messages every minute of every day. Don’t fool yourself; people won’t usually seek you out—they don’t need to! Sharon Michaels asserts in her article “10 Ways to Better Brand Recognition” on Forbes.com , “If you are not consistently reminding your target market that you are actively doing business, they will forget about you and go elsewhere.”
4. Marketing is a service, so expect to pay for time as well as product.
The concept of paying for a person’s time is not uncommon and is seen frequently in creative and service-driven industries. However, marketing isn’t something that a person is conditioned to paying for (not like auto repair or doctor visits), therefore the fact that you may be charged for your graphic designer’s or your web developer’s time (not only the finished product you receive) catches some people off-guard. If you haven’t budgeted for that expense, you risk having to do the design work yourself or ending up with sub-par work.
5. You don’t have all of your brilliant ideas in January.
You’re an entrepreneur. You’re an idea person. When November rolls around and you’ve just had the best ever idea for gifts for your customers, but you haven’t budgeted for them, you’ll be facing an uphill battle.
So, how do you know what your marketing budget should be? In the article we quoted above from Entrepreneur Magazine, there is a simple breakdown provided to determine your suggested marketing budget:
“For companies that have been in business for one to five years, we suggest using 12 to 20 percent of your gross revenue or projected revenue on marketing. For those companies that have been in business more than five years and have some market share/brand equity, we suggest allocating between 6 and 12 percent of your gross revenue or projected revenue.”
There you have it! What services or products do you budget for when planning for your company’s marketing?