The Small Business Association recommends a small business with an annual revenue under $5 million spend about 7-8% on their marketing budget. This means if your business has an annual revenue of $1 million, you should set aside $70,000 for marketing. But marketing is a huge word with a ton of different meanings. That $70,000 can, and should, cover all kinds of inbound and outbound marketing including:
- Social Media management (inbound)
- Landing page designs and other lead capture plans (inbound)
- Website designs with clear Calls-To-Action (inbound)
- Blog posts with a mind for Search Engine Optimization (SEO) (inbound)
- Social Media advertisements (outbound)
- Swag like pens, coffee mugs, water bottles and T-shirts (outbound)
- Sponsorships for local little leagues (outbound)
- A booth at a tradeshow (outbound)
But which of these things are right for your business? That depends on who you’re trying to reach.
You have just 3-5 seconds to make a first impression, and if you’ve diluted your brand message by trying to send too many different messages simultaneously, you’ll lose your audience. At Rogue Wave Marketing, we call this Spray-And-Pray. Knowing your target market is the first step to running a successful marketing campaign. Once we know who we’re talking to, we go where they are and now you’ve got the
right message, at the right time, in the right place!
RECAP: Steps to determine your marketing budget
- How much was your total revenue for the last calendar year?
- Take your total revenue for last year and multiply that by 0.07 (this will give you your base of 7%)
- Decide on target market (check out this post for more info on how to determine out your target market)
- Decide how you’re going to break up that 7% for inbound and outbound marketing based upon that target market. Here’s some tips:
- Consider what will give you the largest Return On Investment (ROI)
- Who has the lowest Cost Per Acquisition (CPA)?
- Break out a budget for any pre-existing events you know have a great return that you want to back (ex: Expos, community events, etc.)
Every marketing decision you make should be backed by science – what can we measure? How can we ensure there’s a solid ROI? If you’re unsure how to tackle all this, Rogue Wave Marketing can help you build this plan for free! Our discovery process is the first step in our work together. By having a solid understanding of your business, your vision and goals for that business, we can build you a custom plan that helps work within the marketing budget that’s right for your business.