Marketing

How much should I budget for marketing?

There are several ways to calculate a marketing budget.  The easiest way to do this is to take a percentage of gross profit – typically 5% to 10%, depending on your business, type of growth, etc.  Another method is to set a reasonable dollar amount that falls within your budget and maximize that budget with the most cost-efficient methods.  For example, one of the most important things a business can do is achieve and protect brand identity.  This is easily done by the managing owner or his/her designate.  Developing your brand is often a daunting task because most business owners don’t know where to start, but partnering with us will make the process simple and painless.  Another must-have item on your marketing budget is a website.  Gone are the days of relying solely on the phone book.  You must have a web presence and you must do it now.  You may have seen the ads for building your own, free website.  You may also have been contacted by website design firms that want upwards of $4,000 for a basic website plus a monthly maintenance fee.  Both, in my opinion, are wrong (details as to why will be featured in an upcoming post).  Finally, you must advertise in some fashion.  Whether you are marketing to other business (e.g., medical specialists marketing to general practitioners) or to the end customer, you must make your presence known and apparent. 

So how much should you budget?  If your net profit is between $100,000 and $250,000 per year, I would suggest you budget at least $15,000 for an initial marketing campaign that includes branding, website, search engine optimization (SEO), advertising (and I use that term loosely), and, most importantly, strategy development.  Every marketing campaign should build on your existing strengths and shore up any weaknesses.  If your net profit is between $250,000 and $500,000, I would suggest a higher budget of at least $25,000 with an expanded scope that includes leads tracking, customer retention and long-term goals.  If your net profit is greater than $500,000, you probably don’t need me.