Did you know that 20% of small businesses fail in their first year of being in business? If you are a new business and want to make sure that you are not part of this statistic then you have to make sure that you invest in marketing in order to be successful.
Keep reading to learn more about how to create a marketing budget.
Calculate Revenue
Before you can decide what your marketing budget is, you have to know how much your gross revenue is every month. This is the amount of money you brought in before any deductions or allowances were paid.
New Companies
For new companies, you want to spend at least 12% to 20% of your gross revenue on marketing. Although this might seem like a large percentage, when you first open your business doors, no one will really know about your business. This is why you have to spend money to get the word out that you exist.
Although word of mouth will also help you out as a new business, it will only do so much. Marketing should be a major focus for new companies to bring in new customers and to establish your brand.
Thanks to the internet you can find resources to market any type of company. For example, here is a resource on how to market an HVAC company online.
Established Companies
A company that is established will want to spend at least between 6% to 12% of their gross revenue. This is less than a new company because an established company already has made a name for themselves and should already have a loyal customer base that is not going anywhere.
As an established company, you will still have to market but if you have a strong clientele that refers their friends and family, it is easier for you to stay afloat and in business.
Marketing on a Budget
Thanks to the internet and social media you can set up low budget marketing campaigns that will help you get the word out about your business and what you have to offer.
Some free and low-cost options include email marketing, content marketing, social media marketing, SEO, and a branded website. When you spend a little bit of time and money on any of these, over time you will see results as long as you are consistent.
Consistency is key when it comes to any type of marketing. Potential clients want to feel that they can rely on you being there.
Ready to Set Your Marketing Budget?
Now that you have an idea of how to set your marketing budget aside, you can get out pen and paper and decide how much you want to spend every month to get the word out. While there is no magic number the percentages above are a great starting point.
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