Small businesses are called small businesses because they have a small workforce and low capital and budget. The biggest challenge that small businesses have to face is the limited capital that they have.
Planning is a very vital aspect of anything that we do, and if done without a plan, believing that everything will be fine and you will succeed is like believing that Santa Claus is real. We understand a small business owner wears multiple hats, and they do not have enough time, but you should understand that planning is very vital to the survival and success of your business.
50% of small businesses fail within five years. The cause is that they spend too much on customer acquisition, but their earning is less than what they spend.
This is why you should plan first and act next. Customer acquisition is essential for the success of any business, and thus you should increase that. One way to do so is by escalating your investment in digital marketing. But, before you do so, you should prepare a proper plan so that this increase does not affect your business’s project scope.
This article is to help you in creating your digital marketing budget by highlighting what you should include and what common mistakes you should avoid.
Marketing is needed to increase the profitability of your business, and it helps in the growth of your business. Despite this reason, according to the US Small Business Administration, many small businesses don’t keep aside enough money for the marketing cost, or they spend their allocated marketing budget uncontrollably.
Such things happen because many small business owners do not plan everything upfront. They lack experience in developing or implementing a marketing budget. So these are some tips on how to plan a digital marketing budget for your small business:
1. Know your customers
To get the highest ROI, you should know where your audience is, and you should invest in the right place and, in this case, on the right platform. You have to find your audience; you have to see which site they spend most of their time. To find the right audience, you should learn information like:
- What is the age group of your targeted audience?
- What is the income level of your targeted audience?
- What is the geographical area of your targeted audience?
- With which brands does your targeted audience regularly interact?
If you are not good at researching or you don’t have time for it, you can go with the shortcut.
Find your most significant competitor or the most successful company in your niche. They are in that position because they are doing everything right and thus you should learn from them. Search which platform they use and how their audience is. This way, you would be able to know your right audience.
Once you have found the right audience, this is the time to find out how to guide your audience through the sales channel. You have to evaluate this as you have to find the value of the return that you will get, and this can be done only by going through your sales channel.
Here is what you have to find:
- Number of sites visits per day
- Total number of leads generated in each month
- Total number of leads that converted to sales qualified leads
- The total cost to generate SQLs
- Total number of leads that turned into opportunities
- Total number of opportunities that close as new deals
- Average value or revenue for a brand new deal
This can be easily tracked down if you add CRM into your project proposal.
2. Your budget should be based on your revenue
There is a saying in India that you should spread your legs according to the length of your blanket.
In the initial days, you have to spend more on marketing, and you have to take less to your home. Businesses usually spend 3-5% on their marketing. You should not gross your budget according to some percentage. The correct allocation depends on several factors.
You can keep a handsome amount depending on how much you can reasonably manage and based on the impact or result that you expect.
3. Spend your budget wisely
In this step, you have to prepare a plan, and you have to think about where you will invest your money?
Your digital marketing budget should be in sync with your overall strategy, and therefore you should spend on the places that can provide guaranteed leads only. You should try marketing resources that are available at no cost. You should try to advertise using Google or Facebook AdWords as these platforms are easy to track.
You can choose Google AdWords keyword planner to find out the keywords your customers are searching to get you, and thus you can target those keywords to rank on Google search.
The best thing about social media ads is that you can experiment with them without spending a lot of your budget. Therefore you should include this in your project scheduling, and you should try till you find the most suitable social media platform for your business.
4. Test and adopt only the best strategy
Remember not to be stubborn on your budget. There will be times when you have to change your budget, like when you are running another campaign or event to capitalize on some opportunity.
The most crucial thing after framing a plan and executing it is to check the results. No plan is perfect, and there is no guarantee that your plan will work as you thought it would. Therefore, you should not stick around your plan, and you should check if it is working correctly or not. If it is not working properly, you should make the necessary adjustments.
The key to constantly monitor and revisit your plan is in hard work, and you should do the same.
5. Follow the leading competitors
The key to preparing the best possible budget is by researching and understanding the present and upcoming trends of the market.
You should adapt to different technologies and platforms to be in sync with the changes in your niche. Example: if you are using email marketing, you should use trending features like email tracking, contact insights, and automated email scheduling. Therefore you should include this in your project objectives, and you should use this in your project execution.
Conclusion
Just keep your eyes on your goal only and budget and move forward according to your project roadmap. You have to try many times before you hit the jackpot and find the right budget, but the key here is that you should not give up, and you should keep on trying.
Author Bio:
Shyamal is the Founder of SmartTask, an online work management tool that’s helping teams be more productive by having clarity on who’s doing what by when. Has a penchant for researching and sharing strategies that could benefit a team’s productivity.
