You spend money on advertising, but that doesn’t mean you necessarily have a marketing budget. And, if you don’t, you’re not alone among other small businesses, according to Steve McKee of Bloomberg.
He says: “It’s OK. You don’t have to admit it to anybody but yourself. Very few small businesses have a formal, consistent marketing line item on their budget. If they do, they fail to base that number on a solid rationale, considering what’s normal in their industry, how much their competitors spend, and other relevant factors. Most take a much more haphazard approach to marketing budgeting.”
He says many companies aren’t sure exactly what to spend on marketing because every industry is different and not everyone agrees what exactly should be factored into a marketing budget.
Instead of worrying about figuring a formula, McKee says to do this: “…accept where you are and work from there. Focus on improving the efficiency and effectiveness of your marketing budget, however you determine or define it.”
And, you can improve efficiencies by defining the audience you want to reach and developing the right messages for this audience.
“There’s no one right way to determine or define a marketing budget, and being internally consistent is all that really matters,” he says.