Small business owners across the world understand that investing in marketing materials and services is a necessary expense to ensure future customers and revenue. Even with this knowledge, many small business owners ignore their marketing plans and budgets until all the money is doled out for the year. This needs to change if small business owners want to be intelligent with their expenditures and get the best ROI possible.
We have four main strategies that were highlighted in the infographic that have a different fit for small businesses at different periods of the business. The four budgets are:
- Dollar Approach – A simple budget style, yet less effective since it’s only a flat rate method
- Match Competitor – In this plan you’re trying to keep up with your competitor, it’s not the most scientific method and you’re only playing catchup
- Percent of Sales – This strategy starts to get a bit more accurate and bases your spending off of your annual sales, generally about 9-12% of sales.
- Marketing Plan Objective – This strategy is the best budget of the four, it’s the most accurate although the most difficult to implement. It involves breaking out your business goals and aligning marketing objective with them. Then you allocate budget to the objectives at the appropriate level.
The most important takeaway is that small businesses should do a more intelligent job planning their budgets for the year and aligning their marketing spend with their business goals. Budgeting can be one of the least fun parts of your year, but very necessary, and it will pay off in the long run.
Infographic by Coastal Creative Reprographics