Building a marketing budget requires good planning and clear business goals. Then you have to determine how much you want to “invest” in your company’s growth. Notice that the word “invest” is in quotations. Most new business owners view marketing as an expense. Huge MISTAKE!
In my opinion, small business owners want to take a trip from Las Vegas to Los Angeles on a quarter tank of gas. The chances are they will get stuck somewhere in the mountains. This is typically what happens to companies that don’t invest enough money into their marketing budget. Start up companies should be very aggressive in marketing because they don’t have brand presence. Or, if your company is not doing well in building constant cash flow, you should consider treating it as a new business.
Someone asked Sumnu earlier this year, “Where do you start when building a marketing budget?” Start with your goals. If you are trying to create a new company then your goal is very simple. In the first year it’s all about brand awareness. Since, you don’t have marketing materials, a logo, website or anything to communicate your value to the customer then you may want to invest about 15%-20% of your anticipated revenue to marketing research, branding, collateral development and internet marketing (including your website). For example: If you want $100,000 in revenues then your investment will be $20,000 in the first year. Over the years as your brand builds a captive audience the marketing investment will decrease.
The goal for most marketing companies is to get their marketing investment as efficient as possible. This makes your company more profitable. If you can develop more “loyal customers” then your company becomes more profitable.
SBA Small Business Champion of the Year 2008
Shaundell is an award winning small business owner. As the founder of Sumnu Marketing, he led the company through the worst recession in the United States history. In 2015, Sumnu Marketing won the SBA Nevada Family Owned Business of the Year. The firm incease it’s revenue by 23% in 2015 and 46% in 2016, respectively. They credit their explosion to developing “Loyal Brand Champions” over the last several years.