Starting up a small business is never an easy task, and there are a number of different challenges that you’ll have to deal with as a new business owner.
Of course, the first step is to develop your product and service to make sure it is as good as possible. However, just having a good product is not enough – you need to make sure that your customer base knows about it, as well as convince them to purchase from you. Although the marketing cost for small businesses can be daunting, it’s absolutely crucial to success in the early stages of a company.
Making sure you reach your target market is no mean feat, which is why it’s important to build a marketing budget that will allow you to achieve your goals. There are a number of different ways you can reach your customers, from social media to in-person marketing with posters and flyers, and you should select these carefully. Keep reading to find out more about making a marketing budget for small businesses.
1. Pay attention to your sales funnel
Understanding your sales funnel and the relevant metrics is essential to creating a good marketing budget for small businesses. The sales funnel describes the journey your customer takes in order to purchase a product or service, and it can be divided into four distinct steps:
Awareness, which refers to your customer discovering your product or service.
Interest, which is when your customer becomes interested in the product or service.
Decision, which refers to the stage where the customer has researched the product or service and is deciding whether to purchase or not.
Action, which refers to the customer actually making the purchase.
You should consider each of these steps when creating your marketing budget plan.
When it comes to awareness, you should consider how you can effectively let your customers know about the product or service. Because this is the first stage, you should expect to spend a large portion of your budget on it, and it can therefore be a significant marketing cost for small businesses.
The customer’s purchase decision can be influenced through discounts and offers. However, if you have a unique or exciting product, you may not need to spend a large amount of your marketing budget on these discounts as they will not be necessary.
2. Be aware of operational costs
The best marketing budget examples take other business expenses into account. Any company will have essential operating expenses, and you need to clearly define these before you can build your marketing budget plan.
Before beginning your marketing planning, consider all your anticipated operational costs and put these into a spreadsheet. These might include things like web hosting, overheads such as rent and utility bills, taxes, employee salaries and more.
3. Set your business goals
In order to decide what to spend your marketing budget on, it’s important to first consider what you are trying to achieve through this marketing. Consider how much you want to grow in this quarter, this year, and even in the next several years, and from this you can calculate how much revenue and sales you need.
Once you know how much you need in terms of sales, you need a way to track the effectiveness of your marketing to see whether you are on track to achieving these goals.
4. Keep up to date with industry trends
When you’re deciding how to spend your marketing budget, it’s essential to take a look at other companies and their marketing strategies. Be aware that these marketing strategies may change over time, so you should be prepared to update your plan in accordance with the industry changes.
That being said, it’s important to include both traditional marketing approaches as well as more innovative strategies in your plan to ensure you cover all the bases.
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