Marketing is at the fore of building a successful company. Spreading a positive word about your company and its ambitions is paramount to determining its success. Although modern startups have the luxury of picking and choosing from a long line of services, balancing the act can be challenging.
As a startup, you lack the financial freedom of an established company. Each decision must be backed by sound financial reasoning and a decent ROI potential. Marketing is one area that many startups fail to balance, primarily because they don’t have a plan or strategy to achieve their marketing targets. The absence of a plan leads to a haphazard marketing strategy, which is sometimes worse than having no strategy.
Setting up a marketing budget regardless of the limited resources gives you an able perspective of what you can achieve. Here’s a little guide to help you put together your first marketing budget.
Estimate Your Revenue
All corporations allocate a specific percentage of revenue towards their marketing budget. However, startups beginning their operations don’t have a revenue model they can follow. In this case, it is important to create a financial projection where you can estimate your gross or annual revenue. A financial model helps set an estimated marketing budget; it also helps you attract investor attention and get venture capitalists on board.
Experts and entrepreneurs experienced in guiding startups to success suggest a bar for a marketing budget. They suggest that a startup should allocate 7-12% for marketing after calculating the estimated revenue model. Newer companies are always encouraged to allocate additional sums for marketing, helping them speed up growth. Although some experts also call for more marketing allocation, the final decision rests with you.
Now that you’ve got an idea of how far you can spread your wings, it’s time to finalize the areas of expense and how you’re going to spend on them. Digital marketing, for instance, usually gets a fair share of the marketing budget. Optimizing search engine results and boosting posts on Facebook to get more eyeballs helps generate attention for your business. Similarly, outdoor marketing and creating awareness about your business in the community are other promotional measures you can opt for.
As a business founder, you should know how to prioritize between different marketing channels. Allocating an ROI target for each investment and giving each channel a fair chance will help you discover the best route for your business.
Professional Success South helps you navigate through your business’s most challenging years by offering you consultation services for business development. We help you achieve your true potential by in-person consultation. We know budgeting for startups is not easy, which is why startups in Los Angeles can get in touch with us to schedule a free coaching session with our experts.