This season, I’ll be discussing the marketing blunders I made with my first business, in the hopes that you’ll learn from my missteps and subsequent experience working with other entrepreneurs.
While working at my first business, I was unaware of this error. But now that I work as a marketing consultant with other businesses, I’ve seen that this is a common mistake. The blunder I’m talking about is failing to set aside a marketing budget for your small company.
Let me begin by giving my personal experience: when I evaluated my business, I discovered that I spent less than 1% on marketing. And, as you may know, marketing is what makes you stand out.
It’s what tells people what you do, what you sell, and how it could benefit them. Your message won’t reach the correct individuals if you don’t spend enough. This will, of course, have an impact on your sales.
Why do so many business owners forget to set aside money for marketing?
Because marketing is intangible in the near term, many businesses make this mistake. The tangible aspects of your company are what you can see or measure in the near term.
Consider factors like operations, staff compensation, raw material expenses, the amount of raw material you’re getting, and the tools you’re investing in. Unfortunately, marketing is not particularly concrete in the near term since getting your message to your client takes time.
As a consequence, many businesses stop up on marketing too quickly since they aren’t seeing any returns.
According to Harvard Business School study, in the first few years, you should spend 20% of your overall budget on marketing since that’s when you’ll need it the most to build brand recognition. You may cut it to 8 to 12 percent after you’ve settled in and generated enough sales.
However, if you spend less than that, it will take significantly longer for your message to reach its target audience. And, if you’re a small company, the longer it takes, the more money you’ll have spent on things like operations, payroll, and raw material purchases, among other things.
As a result, if you spend too much time on other things and not enough time on marketing, you won’t be able to produce enough sales, which may lead you to quit up.
Because it happened to me, I’m telling you about it. I want you to know as an entrepreneur that this is a regular event for many businesses.
As a result, many firms fail during the first one to five years of operation. Be aware that putting in insufficient effort into your marketing will have a long-term influence on how well your business performs.
What should your marketing budget be?
Now that you understand how critical it is to spend money on marketing, the next step is to figure out how much you need to spend. I did mention you may spend between 8% and 20%, but that’s only a suggestion.
You may not be able to spend that much as a small firm. So, how do you determine how much money you have to spend?
I strongly advise you to make a strategy for what you want to accomplish in terms of marketing.
It’s possible that the channels you’re interested in are what you want to promote to. You may already have a presence on Instagram and Facebook, and you may want to concentrate your efforts there.
You can also have a website and want to utilize Google AdWords to attract traffic to it. Or maybe you’d prefer to do something completely offline, such as attend networking meetings or purchase a stand at a relevant event.
Whatever the case may be, you must make that choice for the sake of your organization. Which channels do you think will bring you the most sales?
You may begin budgeting after you have a clear idea of where you want to go. And it’s excellent if you already know how much something will cost based on past experience. Otherwise, you may get all of this information on the Internet.
So that’s one way to figure out how much money you’ll have to spend on marketing. Another alternative is to examine your marketing budget and commit to a level of expenditure that you can maintain for the next several months.
For example, I’ve committed to spending $5,000 on marketing each month, and I keep to it. I also try out new things once a month to see how they function. So for a month, I experimented with Instagram promotions, spending my whole marketing budget on them to see what kind of results I could achieve.
Was it making me more aware? Was it increasing my sales or increasing my followers? I switched to a new channel the next month, such as Facebook advertisements, and analyzed the results appropriately.
You might alternatively spend your money on products that aren’t digital. For example, I recruited a three-month intern who was solely responsible for supporting me with marketing material production.
And that was how I spent my three-month marketing budget. It is not always essential to develop a specialized marketing campaign. You may employ a graphic designer for two or three months to produce all of your marketing assets, such as brochures, business cards, website designs, social media accounts, and anything else that assists with marketing.
Put that money into your marketing budget for the following three months and stick to it. This will help you stay focused on marketing all of the time. You’ll be thinking about marketing all the time while doing this, and after approximately six months, you’ll have a better sense of what worked and what didn’t.
You’ll be able to select whether or not to concentrate on particular channels over time, and you’ll have a better idea of how much to spend in them.
While putting together a marketing budget isn’t difficult, many small company owners disregard it. It’s vital for your small company to have a set marketing budget so that you can concentrate on marketing. If you haven’t yet created a marketing budget, I hope this article has provided you with some helpful tips.
Thanks to Pallavi Tyagi at Business 2 Community whose reporting provided the original basis for this story.