Oh boy
For many, it's budget and planning season, and nothing ruins a perfectly good Fall like having to plan next year's budget. Especially these days.
But there’s pretty much no way around the fact that you’re going to do better with some sort of advertising and marketing. Which means you’re going to have to invest in it, and make no mistake, advertising and marketing are an investment. Business isn’t going to get better all by itself.
We have a few thoughts that can help.
Don’t start with a list of tactics. That's backwards. You'll almost always come up with more tactics than you can afford. In a way, you’re an architect, and an architect doesn’t start with the building materials. He or she starts with a vision. So start with what you want to accomplish. What are your goals for 2022?
But at this point, think in terms of how you can differentiate yourself from the competition in order to achieve your goals. How can you create desire for your product or service that isn’t based on price? You may need some professional help with this.
How much should you spend to get it done? Usually, advertising and marketing budgets are defined as a percentage of revenue, and that percentage can vary depending on who’s doing the defining and the circumstances of any particular business. Startups, for example, need to invest more now than they will as they get established.
The Small Business Administration recommends spending 7 to 8 percent of gross revenue for marketing and advertising for businesses doing less than $5 million a year in sales. We’ve seen recommendations as high as 20 to 25 percent for start-ups. The consensus seems to be around 7-10 percent. Of course the greater your revenue, the smaller the percentage to apply to marketing and advertising. In any case, we wouldn’t suggest going much below 5 percent.
This begs the question, should you base your budget on your current revenue or on your revenue goals? There are definitely cash-in-hand considerations, but we'd go with goals. You don't want to budget just to jog in place.
One last thing. When it comes to actually delivering your message, stick to the media channels that will have the biggest impact. This, of course, requires a good understanding of your target audience, but don't try to do everything or be everywhere. The ROI isn't there. It's a lot better to do a few things well than to do a bunch of things halfway.
That kind of supports that don't-start-with-tactics thing, too.
_______________________________________________________________________
