Budgeting is one of the most important pieces of strategic decision making that a business owner must make each year. Even if your business is in a healthy place, it requires more than looking at what you spent last year, reviewing what you’re earning now and deciding what you can afford. For sustained growth, your plan needs to evolve and adapt to both the changing market and the changing nature of your business. Despite these risks, many small-to-medium-sized businesses do not have a documented marketing plan.
Planning your budget is a serious task. It’s where your capabilities for the year are set down, so you should allow yourself weeks, or even months, to prepare it. If you take time to draft a budget that takes into consideration a clear marketing plan, however, you’ll be on your way to building the best business in your industry on your own terms and be a step ahead of competitors.
Determine Where You Want to Go
Your starting point should be the future of your business. Your budget should actively further your dream for your company by demonstrating how to take your business to the next level step by step and laying out what role each aspect of your company should be serving.
Start by breaking your vision down into the strategic goals necessary to accomplish it. This might include breaking into new markets or deepening your relationships with top prospects. These practical goals will stem from your fundamental understanding of the needs of your business. Are you a smaller, younger business focused on growth? Or is business at a low point and you’re struggling to keep your head above water? If so, you may need to invest in quick-win marketing tactics that will generate revenue fast. But if your business is in a comfortable spot, consider investing in long-term strategies like content marketing and brand awareness that are necessary for a company to reach new heights.
From there, you can start to determine what you’d like each facet of your company to accomplish. This will entail goals broken down in terms of revenue, positioning and branding, customer and prospects and products and services, and how each department, from sales to customer service, factor into that marketing approach.
Figure Out What Works for Your Business Now
But don’t get too carried away! Before you can execute your dream plan, you have to make sure you have the capability to do so. Start thinking about the major marketing campaigns and initiatives that will be necessary to accomplish your goals, and determine if you’ll need new hires, contractors, technology or equipment to carry them out. Talk to the employees on the front lines—your designers, copywriters, sales staff, etc.—to get a sense of the skills, experience and capacity they have to get things done. Create a bottom-up plan of action that works with your top-down ambitions.
It’s important to remember that small changes can affect different aspects of your business in surprising ways. Branding decisions, for example, affect how salespeople and customer service representatives present themselves to leads and customers. A good budget plan accounts for the changes in detail necessary to keep the business consistent and operating smoothly.
When trying to determine how the plan will work for each department, use KPIs that measure success by each department’s standards in addition to company-wide goals. Use tracking to analyze prospects’ and customers’ paths to conversion and check each touchpoint along the way to see how roles function. And when you’re ready to communicate your plans to employees, generate enthusiasm by making clear the advantages the new plan provides for each department and the potential cost of inaction and complacency in a competitive market.
Distill Your Plan into Actionable Numbers
Now you need to turn your plan into concrete numbers that can guide and fuel your actions throughout the year. Convert your goals into quantitative values like total revenue, profit, products sold and number of new customers, then assign sales or conversions broken down by product, service or channel to each of your departments.
To figure out how you’ll get there, you’ll first need to break down what resources you have available, which means determining the resource distribution that will form the core of your budget. Ultimately, it all comes back to your reliable revenue. Studies show that companies dedicate on average somewhere between 8 and 11 percent of their overall revenue to their marketing budget.
Look at the goals you’ve developed and the exact amount of growth you’re pursuing. If you’re looking to stay the course, you may be able to get away with committing five percent or less of your revenue. But if you’re looking to grow—and in a competitive market, you really need to be growing to stay secure—consider increasing that number.
The upcoming 2019 B2B Marketing Mix Report has found a five percent rise in companies spending fifteen percent of their budget or more.
Consider the real cost of the current marketplace, with hands-on traditional tactics like account-based marketing promising big wins and advanced digital targeting and tracking offering newfound insights and personalization capabilities. These tools offer superior performance, but at a cost, and companies have to adapt. But once you’ve determined the cost of success in the current market, you’ll be able to put the pieces together to create a budget that serves as a reliable blueprint for the business you want to build in the year ahead.
Plan Your Budget Well Now to Improve Your Whole Year
It may take some extra effort, but budgeting offers the opportunity to take full control of your resources. It’s a unique chance for you to play offense in terms of your business’s future, rather than merely adapting to demands as they come up. By drawing a line between where you want to go and where you currently are and then determining how best to allocate revenue to fit that path, you’ll end up with a business that improves in everything from culture to profit and thrives in your desired markets.
Are you looking to use your budget to improve a certain area of your marketing? If you need to determine what efforts to prioritize or you need extra help getting the job done, request a free marketing audit from Sagefrog Marketing Group to get tips from the experts and find out how you’re performing on a channel of your choice.
Are you interested in B2B marketing services? Contact Sagefrog Marketing Group today.