As a small business owner, one of the most important investments you can make in your company is marketing.
When business owners meet with us, they very rarely know exactly how much they should budget for marketing. This leaves them feeling overwhelmed and unsure of where to allocate their funds.
To help you figure out how much your small business should budget for marketing each year, here are some key points to consider.
Defining Your Marketing Budget
Before diving into specific numbers, it’s important to first define what exactly is included in your marketing budget. This can include things like advertising, website development and maintenance, branding and design, social media management, SEO and content creation. It’s also important to consider any ongoing or one-time costs associated with these areas.
With limited funds, it can be difficult to determine just how much to allocate towards promoting your brand. While there is no one-size-fits-all answer to this question, there are some guidelines that can help you determine an appropriate budget.
According to Local IQ, a local business that is seeking to grow typically invests 10% of their revenue towards marketing. While this may seem like a high percentage, it is important to remember that marketing is an essential component of growing your business.
In fact, failing to invest in marketing can lead to limited brand awareness, a lack of customers, and ultimately, a decline in revenue. However, for small businesses just starting out, investing 10% of their revenue towards marketing may not be feasible.
Generally, it is recommended that small businesses allocate 5%-10% of their top-line revenue each month towards marketing. This means that if your business generates $10,000 in revenue per month before expenses, you should be investing between $500 to $1,000 per month in marketing efforts.
When it comes to choosing which marketing efforts to invest in, it is important to consider your target audience and what platforms they are using.
For example, if your ideal customer is a millennial, it may be more effective to invest in social media advertising than traditional print advertisements. Additionally, analyzing the success of previous marketing campaigns can help you determine where to allocate your funds. By tracking metrics such as website traffic, lead generation, and customer conversion rates, you can identify which marketing efforts are generating the most return on investment (ROI).
As your business grows and your marketing efforts become more successful, it may be necessary to adjust your marketing budget.
For example, if you find that a particular social media platform is generating significant ROI, you may want to allocate more funds towards advertising on that platform. On the other hand, if a marketing campaign is not generating the desired results, it may be time to shift funds towards a more effective strategy.
Is Boro Business Lab the Right Investment For You?
At Boro Business Lab, we can apply our “Get More Customers Formula” to your business for as little as $299/mo. That means that if your small business has at least $3,000 per month in revenue then we are a great fit to work with you.
In fact we can apply all of our services to your small business and give your our “Full Formula” package for as little as $1,435/mo. That includes Google My Business management, Local Directories, Review System, Website Hosting, Website Maintenance, Website Security, Website Backups, Social Media Management, Email Marketing, Google Ads, Facebook Ads, Influencer Ads, and Search Engine Optimization. If your business generates at least $10,500 per month than it makes sense for you to consider this option.
In conclusion, investing in marketing is crucial for the success of any small business. While there is no set percentage of revenue that should be allocated towards marketing, a range of 5%-10% of top-line revenue is generally recommended. It is important to consider your target audience, previous marketing success, and adjust your budget as your business grows. By making marketing a priority in your budget, you can increase brand awareness, generate leads, and drive revenue growth.
No one likes spending money and getting nothing in return, but if your investment in digital marketing can revolutionize your business. It can help you make the transition from constantly trying to find customers to having them find you online.