Updated: Feb 7, 2020
Businesses often spend on Marketing without thinking or don't spend at all. Setting a Marketing Budget is good for both scenarios as it will either keep your spending under control or give you comfort to spend in the first place.
You would be surprised how many companies I work with don't have a Marketing Budget, or don't even understand what a Marketing Budget should include. Budgeting is one of the key areas where I can help because in the large corporates the budget process is one of the most important processes they have and I was always in the thick of it.
Start by understanding what your business priorities are - where are the opportunities to grow into new markets or maximise existing markets.
You probably already know what your priorities are, but if not sit back and look at what is going on internally and externally and you should be able to define them. Remember to write them down, so there is a source of truth to refer back to.
Set your budget
Be honest about what you spend today - you need this benchmark to start any discussion. It is surprising how often I hear "we don't spend that much" when in reality, over time, things come creeping out of the woodwork. A dinner here, some sponsorship there, consultancy fees, corporate gifts, hosting your website and more.
Don't try to spread your budget thin, it's OK to say this is not our priority and focus on allocating money where it is needed most.
You know your priorities, and you should know your committed expenditure - wages, heating, IT, etc. So set aside a realistic pot of money to allow you to test and learn. Divide this pot into sub pots of activity so you can keep a track on spend, learning as you go what works and what doesn't.
Manage your budget
Track what you spend, keeping an eye out for over and under spends, work out your return on investment.
It is this knowledge and learning that will help inform what you do next.
Budgeting is a relatively simple process, but one that is often viewed suspiciously.
My top budget tips
It doesn't need to be complicated.
Approach it methodically and with a clear head - don't panic!
Keep your budget tracking up to date.
Stop spending if it's not working and reallocate budget to where it is.
Always think about the bigger picture before making decisions to cut spend - is it not working because of what you're doing, or the wider economy or your competition influencing things.