Out with the old, in with the new; How to determine your marketing budget

StuartGeneral

How much should I spend on marketing? And how much should I expect to get back in return?

It’s challenging to attribute one single activity to one sale and as content marketing and social media become large players in the marketing space, it’s getting even harder to say what one single blog post or Facebook post contributed to your daily sales and number of store visits.

So how much is enough?
How much you spend on marketing depends on the type of business you have and the marketing tools you use. To determine how much you should be spending, consider the following:

  • Business type: Online? Bricks and Mortar? Service?
    For online only businesses it is easier to attribute sales to digital marketing efforts, than it is for services.
    Work out how many products or services you need to sell that will not only cover the cost of your marketing but to also be profitable. Set that as a target when investing in marketing.
  • Market Size
    Local businesses with a local audience need less marketing budget than those state-wide or national businesses that need to build brand awareness across a large area.
  • Competition
    If your competition is on specific channels communicating with your audience, can your business afford NOT to be there?
    It’s always better to regularly communicate with your audience instead of playing defence when your competition launches a new campaign.
  • Business objectives
    Perhaps the most important consideration is your business growth goals. The bigger your goals are the bigger the marketing budget needs to be and the more time you need for planning.

After considering the scale of your marketing, competition and key business objectives, it’s time to weigh up do you have capacity to do it well? Do you have the knowledge or expertise? Would it be more efficient to seek professional help and outsource your marketing?

Your business accountants can advise you on a realistic budget for your goals and work it into your overall business finances.

If you would like to speak with 542 Partners about your marketing budget,

Let’s Talk

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