What you need to know about the marketing budget for small business
The financial side of the business, although sometimes a not-so-talked-about topic, is one of the most essential aspects of starting and maintaining a brand. This week on the Content Queen podcast I was able to talk to the amazing Sukhy (@your_soul_biz) all about marketing budget and vision.
It was so eye-opening to get candid about the one thing that keeps business going ‘round and I think it’s time to start talking about it more - such a beneficial topic with so many key takeaways!
So if you want to learn more about budgeting, expenses, and marketing costs - have a read below or listen to the podcast right here!
What is a budget?
So let’s start by covering the basics because let’s face it, we could all use a little refresher on this! A budget is a system you put in place within your business that outlines all the money that a business is going to spend on marketing and other related projects either quarterly or annually.
More particularly, marketing budgets can include financial expenses such as paid advertising (like Facebook Ads), sponsored online content, marketing staff, registered blog domains, and those alike.
It is so important for businesses to outline their budgets, whether it is quarterly or annually (whatever suits you) to really keep track of how much you are spending and where your money is being used.
If you aren't sure how to keep a budget, and more importantly stick to it, we talk a lot about keeping it simple. Make an itemised list of your income and expenses (excel is great for this) and check/update it regularly. Budget for a 12 month period and make small adjustments (but try not to go over) as you go, this way you can see what you should be prioritising in terms of how and where you spend your money..
Why do you need a budget?
A budget isn't just made for helping you stay on track with your income and expenses, it is also amazing for training yourself to make smarter financial decisions as your business grows.
With a budget, all your needs are covered and you can be clear on your expenses without worrying that you won't have enough to cover them all.
Not only does it help with smart money choices, but it’s also empowering to be in total control and completely aware of your finances so you can be confident in the choices you do make. So instead of worrying if you have enough money left over to buy new software for your business, you can just know and say “Yes, I can go and spend x amount on marketing”.
How to start?
So, if you’re looking at making a killer budget for your business, where do you even begin? Well, luckily we have a few tips on ensuring that your budget is simple, concise, and, of course, efficient!
Review your profit and financial goals and keep them at the forefront of your mind
Look at your sales (here you can see how much money you have coming in)
Segment your goals so you know what you are spending your money on.
Separate your income to portion it over the 12 months.
Separate your income into streams based on the services you offer. Compare what products or services do well in your business.
Don’t be afraid to make assumptions to gain clarity around your income. How many clients do you have and how many do you need to make $xx annually.
Remember there are 2 different kinds of expenses to focus on
Fixed expenses: These stay the same even if your income fluctuates
Variable expenses: Money that changes based on your income
The formula for working out your profit is: Income - Expenses = Profit
Your budget doesn't have to be set in stone, it can change just like your goals. So don’t beat yourself up if you don’t stick to it 100%, that’s totally normal!
Marketing budget for marketing
You might be wondering why we have a specific budget for marketing alone - this is because marketing leads directly to finding new customers and, therefore, you guessed it, profit!
Marketing is a key way to reach your financial goals, but remember that you don’t have to invest everything into it. Start small and work your way up from there, you’ll soon find what you are comfortable with sending.
Make sure to invest in the right areas as well. If you are new to the entrepreneurial game, you might like to focus on brand awareness first before diving into paid advertising. It’s all about patience and trial and error.
Marketing costs
Of course, building a budget can feel a bit intimidating especially when you’re just starting out. Usually, you can work all of the little things out as you go but there are a few things you want to keep in mind, it is your money at the end of the day.
Software: Being an online business usually means most of what you do is online, so software definitely helps in the marketing department, especially with things like scheduling and promotion. Keep this in mind when allocating money to software, some software is subscription-based where the money comes out of your account monthly, others are a one-time payment so just note that down when signing up.
Freelancers: Before taking on a new campaign or marketing strategy you may feel the need to hire a freelancer before bringing on someone full time.
New personnel: When you do hire full-time employees, you'll want to budget costs including their computer, technology, benefits, and onboarding-related needs. So remember this stuff as well!
Advertising: Leave space in your budget for expenses on paid opportunities. Even though this may not be at the top of your list, never rule it out! And if you want to learn more about paid advertising, check out my blog here on Google Ads!
Content creation: When you create content such as videos, photos, or even blog posts, you'll need to put paid time into it. Budget how much money will go into creating this content so you can adjust accordingly.
Marketing Budget for Small Business
A PSA for all my small business owners out there: Marketing budgets are super important for small businesses!
Before you start growing and scaling your business, it's important to keep costs as low as possible so you aren't jumping the gun. Of course, risk is a part of being an entrepreneur but it’s all about calculation!
Without marketing, however, your business won’t be able to grow - remember that promotion is essential in this crazy online world. So it’s always encouraged to isolate a portion of your budget to go directly to marketing, this way you can focus on that as your one-way ticket to clients, customers, sales, and profit!
Investing money in the right areas and having a budget to match is just a recipe for success! That’s why considering these financial things and talking about them is so important.
Final thoughts
If you want to learn more about how to budget for your marketing plans and win the financial side of your business, book a session with Sukhy right here!
And, if you want even more direction with making and maintaining your budget - join the Content Queen membership! There are so many resources and templates on killing the financial game that you will absolutely LOVE! So join today!
Can’t wait to see you there!