Whether you have a startup or an established company, there is something you have to have to be successful: a marketing budget.
However, most business owners or marketing coordinators have the same problem – they need to know how to create a marketing budget and how to estimate the results of each marketing tactic.
We have outlined some general guidelines below to help you create a marketing budget for your business.
New Companies vs. Established Companies
If you are a new company (less than five years old), then you will ultimately need to spend more money to get your brand’s message to your target audience. Specifically, you should allocate around 20% of your projected revenue for your marketing budget. This 20% should include both digital and traditional marketing tactics.
On the other hand, if you are an established company (more than five years old), then you should plan to spend around 10% of your projected revenue on marketing.
In short, new businesses have to spend more in order to get brand recognition. Once you have about five years in the company (on average), you can lower your marketing budget due to having an established brand identity.
New Company? You Have to Spend Money on Marketing
So many startups are on shoestring budgets and therefore do not allocate any money to marketing their business. Ultimately, this is a horrible position to be in and significantly increases the chance that your business will either be unsuccessful or will grow at an incredibly slow pace.
Marketing your business gets your products or services in front of potential buyers, which is how you grow your business. If you fail to market your business, then you are doing a disservice to your new company and will be less likely to see a high profit margin in the near future.
On the other hand, securing funding and utilizing a percentage of that money to help market your business allows you to acquire new customers to cover the marketing expenses and put your brand on the map.
Estimating Your Marketing Budget for a New Business
Now that we have explored the importance of marketing your business in order to improve your chances of success, let’s explore some of the typical costs.
Regardless of what type of business you have, in today’s digital society there are some things that you simply have to have, which are outlined below.
Every business needs to have a logo. This logo will help your brand stand out and will be part of all of your marketing efforts. At the low end, you can expect to spend around $400 for a logo. However, you can spend over $10,000 if you hire a company that specializes in creating strong business brands.
You have to have a website – it’s that simple. Not only do you have to have a website, but it has to be mobile friendly and do a good job of proving that you are a legitimate business. Your target audience, regardless of your business, will research your company online before making a buying decision. Your website should be the center of your marketing efforts.
You can get a good WordPress website (which we highly recommend because it’s easy for you to update, which saves you money in the long run) for around $3,500. If you are looking for an e-commerce website where you can sell products online or a website with a lot of special features and functionality, then you are looking an investment of $10,000 – $50,000.
We do not recommend that you create your own website from a template for a variety of reasons. First, the templates are often not updated and as a result features of your site are likely to stop working with new WordPress updates in the future. Furthermore, unless you have website development experience, you will likely run into a lot of issues that will take a significant amount of time to fix. Finally, a professional website looks better and is customizable, which better represents your brand.
Whether you choose to advertise online only (most affordable option) or you decide to do both digital and traditional advertising, it is essential that you advertise your new business. Digital advertising involves a variety of tactics, including everything from Google Pay-Per-Click ads to social media marketing.
For digital advertising, assume that you will spend around $1,000 per month for a basic advertising plan. If you choose to include traditional advertising (television, radio, print, or billboards), then you need to add an additional $3,000 per month to your budget. We typically recommend that new businesses focus on digital advertising since it is not only more affordable, but is also easier to track return-on-investment (ROI).
In addition to the above, you simply have to create content in order to drive people to your website and build trust with your target audience. We call this inbound marketing. You typically create blog posts, press releases, infographics, and other content with the intent to educate your target audience about your products or services.
Although it does not happen overnight, your efforts will pay off as your target audience not only sees your brand on their favorite social media platforms and in email newsletters, but they also start to trust your business and view you as an authority.
Generally, you can budget a minimum of $700 a month for content marketing if you hire a professional to do it for you (the average is $1,000). If you choose to do it yourself, you will have to calculate the amount of time it will take you, any staff you will have to involve and their time, anyone you will have to hire, and anything else you will have to spend. This typically results in the cost being much higher for a product that may be less than what a professional can create.
It is recommended to hire a professional that specializes in content marketing; it is not only more cost-efficient, but is also more effective than doing it yourself.
Your Marketing Strategy Should Be Tailored
It is essential to understand that you should only work with a marketing company that will create a tailored marketing plan for your business. Every business is different and has different needs. In order to keep your marketing and advertising costs low and get the biggest return on investment, you should work with professionals who can create a marketing plan that is designed for your business goals.
In short, avoid any company that tries to offer you a package or recommends that you do all of their services. Your business is unique and therefore the strategy to best market your business should be tailored to your needs.
Further Reading: More Articles Like This One
Learn more about marketing your business by checking out the two related posts below:
Learn more about getting a return-on-investment for your advertising efforts, including the differences between traditional and digital advertising.
Learn how you can utilize the power of Internet marketing to increase business sales in 2015. This article contains an infographic as well.
More about Uptick Marketing in Birmingham, Alabama
Uptick Marketing is a digital marketing agency in Birmingham, Alabama that works with companies throughout the United States. Whether you are a mom-and-pop shop or a Fortune 500 company, we can work as your marketing partner to help you get results and grow your business.
Contact us today to learn how we can help!