A marketing budget must have relevant information and must be updated regularly. No need for elaborate and exhaustive budget spreadsheets that become unwieldy later on and turn complicated with many twists and turns. The business plan and marketing budget must work well together to provide you confidence in making decisions regarding the business in terms of marketing and promotions. It acts as a roadmap to keep you on course for weeks ahead.
By setting a budget, you estimate your income and cash flow for a period of time. There is no use to create something you can’t manage given your schedules in running the business. It should be detailed enough to provide you a snapshot of where things in the marketing department are heading but easy enough to become a quick reference for those decisions done on the rush.
In details, creating a budget can help your business in several ways. The flow of money should be placed where it is most effective.
Know And Understand
Helping you understand what is happening with your marketing money is the number one reason. It will tell you if you have enough to spend on a marketing and advertising. Will the available funds enough to cover one more headcount to help you at the store for promotional activities?
The budget plan will see the marketing spend every day and anticipate the expenses in the near future. Better cash flow management is another advantage of seeing your budget movement daily.
If you know the performance of similar businesses in your industry, it will be good to compare how you are standing against them. It will always be a good learning point to determine where they are doing better and knowing if you can apply the same. Similarly, if you are doing great in a certain area then pat yourself in the back for doing a good marketing job.
Overspending, tracking if suppliers have been paid on time or income levels per month are other information that is important for you to be on top off as much as you can. It is important for the business owner to own the numbers to make sure you don’t make a decision with a bottom line impact you will soon regret. Marketing plans are supposed to improve your revenue and not drain it.
Later on, should you need to take out a loan it will show how serious you are by planning the marketing activities ahead properly. By referring to your budget plan, it is much easier to explain and justify various different decisions you’ve done to keep the business growing through marketing and promotions.
You may have an option for weekly, quarterly, annual or semi-annual distribution of days in your budget sheet.
To make the budget plan work, do your research carefully. It needs to be as realistic as possible for your marketing budget to become really useful. Plucking numbers from the air is never advised. You need to do some proper research to have the realistic numbers within reach. If you don’t have any past performance to look at, start with typical expenses and trends in your sector.
Keep your marketing budget as simple as you can. Striking the right balance between usefulness and complexity is vital. You don’t have to list each expense in minute detail – that just makes it harder to update your excel file.
The reason you are making your budget visible is to make things easier to look at and decide, not to make things become a burden to an already challenging life of running a business.