My favorite thing to do is to figure out how to best maximize your dollars and make them work for you. It is really a numbers game. All small businesses would love to have a large budget to start with, but the reality is, generally, it’s not possible in the growing stages of a business.
So, how do you properly plan and allocate your funds into the right sources to grow your business and eventually have a larger budget to work with? Based on my experience, here are a few guidelines.
FIRST, DETERMINE YOUR OVERALL ADVERTISING BUDGET
This number should be approximately 3 to 7 percent of your gross revenue. This number depends on what you can afford, your competition and even your business location. When you have a hard number to work with, it is much easier than guessing, overspending or going into debt. A budget should not be a big secret. The more open and honest you are about it, the more willing other professionals are to help you stay within that range and make it work for you. You will end up feeling better about yourself and your business at the end of the day if you are sticking with your budget. Seek out a financial advisor if you need some help to jump-start your budget and get numbers on paper.
SOURCES TO ALLOCATE YOUR ADVERTISING BUDGET
4 Key “Must-Haves”; Logo, Mobile- Friendly Website, Business Card and Letterhead — 60% of your budget:
These four elements are essential for any business and will get you out of the gate at a good pace. You have branding, credibility, and the ability to market yourself to generate business and income. Now, you don’t want to pour your entire budget into these four elements. You need to consider print and digital advertising as well.
Print Advertising/Promotion – 15-20% of your advertising budget:
To help promote your business and get in front of other businesses and people, you will need a rack card, signage, and possibly a banner or promotional item. Remember, you don’t have to do everything at once. You can plan a little bit to add on each year for exposure. It is OK to start small and simple.
Digital Advertising/Promotion – 15-20% of your advertising budget:
Digital advertising goes right along with print. This would be your online and digital ads: Facebook Ads, Google AdWords, TV, radio, etc. Much more advertising nowadays is going digital since many people are “on-the-go” and using their smartphones and tablets.
Business Networking, Associations, Chamber of Commerce, etc. – approximately 5% or less of your advertising budget:
Five percent or less is an approximation, depending on how much you spend in the above categories. These are not hard and fast numbers, just a range to get you started. It is important to get in front of people to physically pass out a business card or rack card. Networking can provide many opportunities to meet others, become a referral source, learn what others are doing and be active in your community.
In short, you don’t need a huge budget to get started. You need a good professional team who can take your real numbers plus your goals and make everything work for you. Starting small is sometimes where some have to start in order to grow into more. Whatever size budget you start with, remember that as you grow, you want to continue to reinvest, which will allow you to grow your advertising budget and do more over time.
Natalie Fisher is the Director of Sales, Marketing, SEO and Social Media at Blu Dove Designs. She assists clients with their needs and the team on project management. Visit bludovedesigns.com for more information.