So, you’re a business owner that has a great product or service but have you thought about how to market that product or service or the budget needed for the marketing plan? You find yourself with the need of some funds to start but you are not sure how to start. This process involves many factors, like having a marketing plan. Part of this plan, a very important part, is to have a budget (if only we would have all the money to achieve our great ideas, right?). First, let’s make a plan…then we can talk about how to create a marketing plan budget.
Create a Marketing Plan
Depending on the kind of business you plan to open, services and needs can vary. To begin, you can determine the timeline your plan will cover, it can be for a month, quarter, or a year. You just need to stick with it and as your business grows you can adjust it more according to your needs in the future. Creating a marketing plan is crucial to finding out how you will need to spend your marketing plan budget.
Through this, you can outline the investments and expenses you might have for the different areas of your business. Besides the monthly or yearly liabilities (payroll, taxes) and expenses (lease, utilities, maintenance, insurance, supplies, travel, entertainment, miscellaneous, etc.), you also need the funds for advertising your business which is a key factor to become known, right? Here are some points to have in mind before making decisions.
- Determine your objectives. Who will be your target? How would you like your brand to be seen? How do you plan to campaign?
- Know what kind of marketing you will need. Do you need B2C (Business to Consumer) marketing or B2B (Business to Business) marketing? B2C marketing types need to focus on your product or service. B2B marketing types, you focus on the people that will use your business. They want to know why they need to use your product or service and how it will either effect or help their business.
- Think about costs that will occur during this process.
- Costs for developing your product or service.
- Costs involved in researching your competition
- Costs of finding the best marketing strategy that works for you and your business – like product or service giveaways or just trying different versions of your service or product.
- Costs for networking with your local Chamber, community groups, or associations to create local awareness of your brand.
- Costs of advertising campaigns using digital or traditional marketing techniques. Would you rely on social media? Do you need a website? Do you need to send regular emails? Would it be better to find an in-house marketing manager or to outsource to a local agency?
Overwhelmed yet!?!?! Relax…it can be a lot, but if done carefully it will pay off now and in the FUTURE. We have all gone through the same overwhelming feeling, but we want to help lighten that burden for you. We know about digital marketing and we can give you some points to keep in mind when it comes to spending money on digital marketing. I got sidetracked…now, where were we?
This all leads you to creating a marketing plan budget.
Creating a Marketing Plan Budget
I guess the big question is how to know how much to invest in the different channels that involve marketing your business. Digital or traditional? You must keep in mind, ultimately how you budget your money depends on the kind of business you are planning to market.
Consider investing in traditional marketing if you feel it is valuable to you; however, budget amounts for traditional marketing is decreasing against digital marketing. For a long time, businesses focused on advertising in TV, radio, newspaper, billboards, etc., but nowadays, with the increased use of social media and the internet more businesses are focusing on digital advertising.
The internet is like your virtual storefront. Your customers can always find you there and know EVERYTHING about your business in a matter of seconds. Social media platforms remain relevant because of the traffic they generate thanks to customers liking your products or services, being able to instantly communicate with your business and how easy they are brought back to your website where they can easily make purchases. It is all a circle.
Now it probably helps to know how much your marketing plan budget will cost right? Here we spill the beans for you. You will need:
- A domain name which can run $15 per year. Sometimes more, sometimes less.
- Website Hosting
- With SSL (Secured website or HTTPS): $105 to $250 per year
- With CDN (Content Delivery Network): $10 per month with most CDN providers. This is good to keep bandwidth on your website lower, as your files like images or styles are hosted on the CDN instead of your server.
- Website Development
- Budget websites without a CMS (Content Management System): $100 – $500 per month
- Website with CMS: $3,500 – $5,000 based on requirements
- Website with eCommerce: $5,000 – $20,000 based on requirements (SSL are typically required to process payments)
- Ad Buys
- Most agencies recommend an ad budget for either social or Google to start at $500 per month and most charge between 10% – 20% to manage the ads
- Create keywords and find their costs as some keywords are competing against millions of other websites and cost more on average compared to obscure keywords that may net you more in the long run and may also cost less in the short term. Do your research.
- For social, do you want to run an ad or boost a post? Either way works but your target changes based on which you decide. Find one that works for your business.
- Maintenance of the website
- $100 – $1,000 per month
- We recommend keeping at least a 6-month commitment for the maintenance to be viable
- Decide if you need upkeep, SEO, social media, ad buys, etc on a recurring basis
- $100 – $1,000 per month
Why Create A Marketing Plan? Budget
Based on a recent study information to keep in mind is as follows:
- The average SMB (small and medium-sized business) spends $400/month on marketing or 2%-5% percent of their total annual revenue.
- SMBs spend on average, 46% of their marketing budget on digital marketing.
- 78% of SMBs think that mobile marketing is an important channel for their business.
- Businesses who rely more heavily on the internet to generate sales (i.e.. an e-commerce business) invest a greater percentage of their marketing budget towards digital. For more traditional businesses, which rely on offline AND online activity to fill the sales funnel, a healthy mix of marketing investment is to be expected between traditional and digital…with digital usually being over 50%.
Other Steps to Improve Your Plan
So, setting money aside for digital advertising is a good step to follow by doing the next moves:
- Set money for aside for a website. Get a crack team of marketing experts (ehem…us, for example) and request or ask if they offer Google AdWords. But, why? So people can look for your business in Google and then BAM! There you are front and center. A great marketing agency can usually get you in that treasured number one spot for ad searches which can turn the tide towards your business.
- Persona development. Have you thought about a persona for your business? (you know how you want your target to perceive your business and who this typical “person” is) so you can connect with them better.
- Socialize. Create a page on social media platforms you think will benefit your business the most based on your clientele and demographics. There has been extensive research on who uses what social networks as they are not created the same for the same users. Find the ones that meet your personas. Use this page as a place where you could interact with customers and communicate with them establishing a connection again.
In the End…
It is very important to explain the purpose behind your brand. By doing so, you will create a story that consumers will want and can identify with. Purpose-driven marketing, which is the “why” behind what you do, is one way you can set yourself apart from your competitors. Having a solid marketing plan and knowing what to budget for in that plan will set you apart and prevent your customers from finding your competitors first. Be concise and stick with it, only pivoting if something fails. Also, just a reminder…find a good agency to help (did I mention we have won awards for this type of thing, *wink wink*).
Bonus Round, LOL…
A few tips to keep in mind:
Track everything! You will be thankful for your sanity afterward. Get your numbers straight and prevent yourself from making mistakes over and over again. Find what works and what doesn’t. Keep doing what does and drop the rest.
Review your ROI every month! Where are your customers coming from? *HINT* (Google Analytics will help with that). If you are spending a lot and not seeing a return either move on or refine what you are doing to make it better. Don’t just let bad marketing rule your money.
Don’t overspend your budget! You are still at the learning stage with your expenses. If your business is growing, that is awesome and you should maybe reinvest in it….but know your limits. Don’t waste money where it is not needed and don’t spend money on a sinkhole.
Lastly, figure out a spending formula that will be a convenient part of your sales percentage so you keep track of your marketing plan budget is working for you. Determine how long you will work for something (i.e., set an overall goal, a budget goal, and a revenue goal) and stick to it.
Good luck with your marketing plan budget and if you have any more tips, leave them in the comments below.
If you are interested in learning more about how this topic can help your business, please contact our agency on our contact page or call us at 1-888-964-4991. We publish a new article once or twice per month so make sure to follow us on social media and allow for push notifications if you want to stay in the loop with our agency and digital marketing.
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About the Author
Kelly Oliver is a Peruvian native who has been on the Mississippi Gulf Coast for 12 years and enjoys good Spanish food and Salsa dancing. She has almost a decade of experience in the casino and retail field. However, after an opportunity to work in the accounting field presented itself, she found that she had a real passion for numbers and spreadsheets. She decided to pursue an Accounting career.