marketing expenses in business plan

A List of Typical Marketing Expenses

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Factors Affecting Promotion Mix

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How big should your marketing budget be? Ask a marketer this question, and she'll say you should invest the amount that works best for your situation, based on the marketing mix set out in your marketing plan. That requires an explanation. Before you can list the kind of expenses you may be in for, you must understand the 4P's of the marketing mix: Product, Price, Place and Promotion.

What Is the Marketing Mix?

Every marketing plan starts with establishing the overall goals for your business. Which customers do you want to target? Are you looking to break into a new market locally or internationally? Do you want to increase sales, build brand awareness, grow market share? These questions constitute your where : Where you want the business to be in one, three or five years.

Once you've articulated the strategy, the next step is to figure out the how – the concrete measures for achieving your goals. The starting point here is the marketing mix, which consists of the 4Ps: Product, Price, Place and Promotion .

The 4Ps are the basic tactical components of a marketing plan. For most businesses, the marketing mix is an excellent way to ensure that you put the right product at the right price in the right place with the right promotion, so the customer has the maximum incentive to buy.

Understanding the 4Ps: Product

Your product could be a tangible product (clothes, hand tools, washing machine), an intangible product (computer software, data), or a service (legal advice, consulting, web design). The common factor is that it satisfies a customer need or demand.

A basic rule of marketing is that all products have a life cycle. Is your product new to the market? Do customers know that your product is even a thing yet? Typically, businesses with something new to offer need to push their marketing. They are trying to establish their brand and gain loyal customers. To do that, they may bring in a PR agency or pay for expensive television advertising to get the word out.

Mature household-name products, on the other hand, don't need nearly as much investment. If Kleenex brought out a new brand of tissue, people would buy it without a second thought, just because they saw the product on the store shelves. The same cannot be said of the Acme Tissue Corp., which must allocate a lot more of its gross revenue to advertising to achieve the same traction.

Understanding the 4Ps: Price

How much is the customer expected to pay for the product? If the product has a high perceived value like a once-in-a-lifetime vacation package or designer sunglasses, you can probably charge more for it. Products with a low perceived value, on the other hand, must be priced equally low or your customers will get sticker shock. Look at generic painkillers: they do the same job as their branded competitors, but customers perceive the branded version to be better, so it is.

In many product categories, pricing is the first impression that enables the customer to form a perception about the product's quality. If you need to change that impression, then you have to work hard – and spend a lot of marketing dollars – to reposition your product in the market.

For example, if a low-cost competitor comes in, but you're not prepared to cut your price, you may have to refocus your marketing efforts away from price and toward explaining the additional benefits of your product, and why the customer is getting more for his money if he chooses you.

Understanding the 4Ps: Place

Where will the customer make a purchase? How will you get the product in front of the customer in that location? Distribution is a key element here, but you might also have to think about how a customer can access the product. Do you need a website with a shopping cart facility? Salespeople? Physical stores?

Channel decisions have a massive impact on the marketing budget and the type of expenses you might incur. For example, suppose a small business that sells baby equipment plans to strike deals with the major baby outlets and grocery chains as a low-cost way to get products in front of customers. A large slice of its marketing expenses may be allocated to hiring salespeople or a brand manager, networking, pitching and preparing for increased volume production.

Now suppose that the same company chooses to sell its products directly to customers through its own website. The list of marketing expenses looks completely different and may comprise website development, photography, sales catalogs, ads, social media and SEO.

Understanding the 4Ps: Promotion

How will you communicate the benefits of the product to the customer? How will you make sure your key messages are remembered and understood?

There's no one-size-fits-all for small business promotion, and your options here are as long as they are broad. Will you increase product visibility through sample sales, competitions and special offers? Will you rely on influencers to spread the word about your product? Does your target market respond best to mass media advertising such as television, radio or magazines?

Each of these promotional strategies entails a different type of marketing expense, which in turn has a different impact on your overall budget.

What Are Marketing Expenses?

The 4Ps don't just play a role in the marketing spend; they provide a justification for every single line item in your budget plan. These line items are your marketing expenses.

In accounting terms, marketing expenses are defined as expenses that directly relate to the selling of a product, service or brand. Your marketing spending categories might include printed publicity materials, newspaper advertising, the marketing team's salaries and the cost of Facebook ads.

If the expense is necessary to run your campaign, but you'd incur the expense regardless of whether you were selling the product, then it is classified as an operating expense. Stationery, utilities, insurance, and supplies are operating expenses. These costs are necessary to keep the lights on.

Now that you understand what marketing expenses are, look at the specific types of marketing expense your small business might encounter.

Personal Selling Costs

When an individual salesperson sells a product by speaking directly to a customer, that's personal selling. Business owners might tackle this task themselves in the early days, but it is usually handled by experienced professionals who have the skills to find prospective customers, qualify them for their business potential, plan a sales approach, and develop a long-standing relationship.

In terms of the marketing budget, you need to factor in the cost of recruiting, onboarding and training a sales consultant, as well as the salary expense. Many salespeople work on commission which reduces the amount you need to allocate in the marketing budget, although the commission will reduce your gross revenue when a sale is made. Another option is to outsource the sales function to an agency in return for a fixed or performance-based fee.

Personal selling is a "push" strategy because you're taking the product to the customer. For best results, don't forget to factor in the cost of business cards and product brochures, and the cost of developing sales scripts for your salespeople to follow.

Website and Digital

Your website, blog, newsletter and social media presence are "pull" strategies , meaning they attempt to create interest in what your business is doing and "pull" customers towards the brand. Pull strategies often represent the cheapest forms of advertising.

Designing a website has an initial upfront expense, but it can be done cheaply if money is tight. Once the website is running, ongoing maintenance costs tend to be low. Typically, the largest cost relates to the staff or freelancers you hire to plan and write your content and search engine optimization strategy. If you do this yourself, there's a time value attached to the expense. It may be cheaper to bring in outside help and free up your time for more strategic endeavors.

Advertising Agency Commissions

If you're new to marketing, then hiring an advertising agency is the obvious first step toward getting your messages out there. Full-service agencies offer a turnkey approach, managing television ads, radio ads, film crews, print advertising, brochures, copywriting and traffic creation on your behalf. They usually charge based on time spent on the campaign or by commission based on your annual advertising expenditure.

If your budget doesn't stretch to an agency, you can manage the campaign internally. Any plan should address the media you intend to use – billboards, transport advertising, websites, newspapers, social, trade magazines, TV, radio, cinema and so on – and you pay the media provider for the space. Budget for hiring designers and copywriter to develop the creative elements if you don't have these capabilities in house.

Even with a DIY approach, advertising can eat up a large part of your marketing budget.

Direct Campaigns, Printing and Mailing

If you thought that print was dead, think again. Research consistently finds that consumers prefer snail mail over online advertising methods. When done strategically, direct campaigns can be a cost-effective way to increase revenue for your business.

Direct mail includes anything that lands on the customer's doormat including flyers, postcards, sales letters, coupons, special offers, catalogs and brochures. If you've ever received a preapproved credit card application or a flyer from a real estate broker informing you of the current market value of your home, that's a direct mail campaign.

Take care when budgeting these items. While direct mail pieces can cost as little as 30 cents per mailing, you may have to spend considerably more when preparing the campaign. Mailing lists cost money and, unless you already have data on your target customers, you're going to have to buy those records. You need a designer and writer to put the literature together and don't forget print costs, which vary depending on the size, color and quality of your mail pieces.

Some businesses do much of this in-house and wind up paying only for printing and mailing.

Marketing Salaries and Fees

Employee costs can be significant if you hire an internal marketing team. Large businesses may retain several specialists under the marketing banner such as a marketing manager, content manager, graphic designer, email marketing associate, press officer and social media manager. So, the overhead can become extensive.

Hiring freelance specialists to take care of these functions provides a lower-cost alternative if money is tight.

Customer Research and Surveys

Although market research sounds expensive, you can get a lot of data cheaply from the internet and industry magazines. Online surveys like those from Survey Monkey are quick and inexpensive and can turn up valuable information about your customers' needs and preferences.

If you were thinking of launching a new chocolate bar, for example, you could send out a quick survey to your customers asking, what flavors they prefer and how much they would be willing to pay for a regular-sized bar.

Market research becomes a big investment when you need custom detail. Budget anywhere from $15,000 to $35,000 for a report covering the performance of the market, trends of competitor products, and data broken by industry sector or within specific regions or demographic groups.

A List of Everything Else

Because each company's objectives are unique, the list of marketing expenses they incur vary. Here are some of the other marketing expenses you might encounter:

• Branding development: logo, visual branding, tone of voice development
• Business cards
• Marketing consultancy services
• Coupon development
• Website content management system and file management
• Gifts and samples to customers
• Video marketing
• Trade show displays
• Sponsorships
• Public relations
• Proposal development and submitting bids
• Event attendance
• Design costs
• Travel expenses
• Marketing automation tools

Just be sure to factor every marketing cost into your marketing budget and track them carefully. Otherwise, your ROI figure will be inaccurate when you assess the returns you're getting from your marketing campaigns.

• Cleverism: Understanding the Marketing Mix Concept – 4Ps
• Marketing Profs: Print's Not Dead
• Media Space Solutions: How Much Does Direct Mail Marketing Cost?
• Accounting Tools: Marketing Expense
• Market Research: 4 Tips for Determining Your Market Research Budget

Jayne Thompson earned an LLB in Law and Business Administration from the University of Birmingham and an LLM in International Law from the University of East London. She practiced in various “big law” firms before launching a career as a business writer. Her articles have appeared on numerous business sites including Typefinder, Women in Business, Startwire and Indeed.com. Find her at www.whiterosecopywriting.com.

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How to Effectively Track Marketing Expenses

A marketing expense is a marketing expense, right? In the sense that they all hit your budget, yes. In most other respects, not really.

The team dinner check, the hotel block-booking for a trade show, the rush print job for the key customer visit, the dreaded expense that’s transferred in from another department, the CRM subscription…different types of expenses have very different life cycles. Some of them you can – and should – plan for. Some you need to know will happen anyway and accommodate in your planning.

There’s a pretty finite set of expense types that you will deal with. In this blog, we first define marketing expenses and list expense categories with examples. Then, we will deal with the life cycle of a typical marketing expense, and then we’ll talk about how different expense categories fit within – or occasionally violate – this life cycle.

Article Contents:

• Defining marketing expenses
• Categories of marketing expenses
• The expense life cycle
• Planned vs. unplanned marketing costs
• Tracking expenses

What is a Marketing Expense?

A marketing expense is the amount of money spent in promoting, advertising, or marketing a business and its products, services, or solutions. These expenses are costs that directly contribute to the performance of marketing activities and overall efforts.

Categories of Marketing Expenses:

In today’s age, expenses can cover everything from digital and social media advertising to marketing automation platforms. Here is a breakdown of how marketing expenses are categorized:

• Salaries, benefits, and other costs for marketing employees
• Softwares, tools, and automation platforms
• Outside vendors, agencies consultants
• Advertising expenses
• Public relations costs
• Events/trade-show costs
• Team trainings, conferences, and corporate outings
• Travel expenses

The Expense Life Cycle:

Once you know this, you can look at the expenses in your plan with a fresh eye, manage your marketing budget , and ensure you’re treating them in the most useful way for you and your team.

Estimated→ Committed → Charged → Reconciled

Estimated expenses

We have to estimate expenses all the time: we know we’re going to need to book some rooms and pay for some meals at that upcoming event; we’re going to need a creative agency for our upcoming campaign; we’re going to publish some billboards downtown.

When we know about these expenses in advance, we should estimate the expenses. Planned marketing expenses should have estimated amounts.

Committed expenses

Some marketing expenses will be large enough and far enough in the future that we decide to negotiate the price with a vendor. We may sign a contract to lock in that price along with other terms. For example, you might outsource an advertising agency for a social media campaign, a creative agency to help you prepare for an event, or a new technology platform to automate some of your marketing processes.

Once you’ve signed the contract, you have a more precise view of the cost than your initial estimate, and you know you’re on the hook to pay that money (unless the vendor somehow breaches the contract). You haven’t been invoiced, and the service hasn’t been delivered, but you know you will pay a precise amount in the future. Negotiated expenses should have very accurate cost estimates.

Charged expenses

From the marketers’ perspective, expenses are charged once the service has been delivered or once an invoice has been sent. Note – the expense should be marked as charged regardless of whether or not it has been paid by finance. Marketing teams should first care about how much budget has been consumed and how much is left.

Surprisingly, we have frequently met marketers concerned about when and whether a bill has been paid. When a bill is charged against your budget is important to understand – see our article on accruals versus cash-based accounting to see why.

But when a bill is paid it is a finance team’s concern that does not affect how much marketing budget is left. We recommend you treat invoicing as the trigger to mark an expense as charged. Likewise, you should treat credit card expenses as charged.

Reconciled expenses

There’s more after charged? Yup. Most marketing teams receive a periodic report from finance that includes the accounting system view of all the paid bills charged to marketing.

Most of the time, this will contain line-by-line confirmations of what you already know and have in your plan. However, the final accounting of marketing expenses may well contain changes that you need to know about and pay attention to. For example.

• You didn’t anticipate the sales tax for your finally negotiated price, and the cost that finance has to account for is a little higher than you thought
• Finance has charged something to marketing that surprises you – it wasn’t in your plan. This might include some credit card expense that you didn’t know existed until now; an expense transferred in from another department, or a change of date to an expense due to accruals-based accounting

In any case, it’s imperative that you snap your plan into line with the finance team’s report to ensure that your pretty-darn accurate view of the charged marketing expenses is ultimately locked into the financial system of record.

The problem is, you can’t wait weeks or months for those finance reports, or you’re flying blind, and it’s impossible to spend accurately, decisively, and at the right budget burn rate. So you must develop and manage the highly accurate team-sourced view of the reality of your charged expenses well ahead of the finance report. Demanding accurate, real-time expense status from the entire marketing team will enable you to make fact-based, accurate decisions on time.

Now we have our model and understand the stages, we’re going to review the different types of expenses and how to manage them to best achieve your marketing goals. Not all expenses go through this process; some just appear at different stages – even at the last stage. In the subsequent section, we’ll cover those at a high level and capture them all in a single model.

Carried-over expenses

When you enter your budget year, your budget should contain at least many estimated, committed, and possibly even charged and reconciled expenses.

You should try to get those into your plan in as much detail as possible, so you have an accurate forecast of spend and a clear understanding of what’s left to spend. Examples of these expenses include:

• marketing campaigns that cross fiscal year boundaries
• annual events
• subscription fees for data or technology
• open PO’s for contractors, agencies, etc
• corporate allocations
• depreciation

Many of these marketing expenses will be at least charged and often reconciled on day 1 of the fiscal year.

Knowing the Difference Between Planned vs. Unplanned Expenses

Though there are expenses that can be planned for, there are many unplanned expenses that will crop up through the year. The more thoroughly you can add your planned expenses into your budget, the better your visibility into what remains to be spent and how close to over budget you are. Keep reading to learn more about planned versus unplanned expenses.

Planned Marketing Expenses

If you have a new campaign, set of expenses, or an individual expense that you know is new for the fiscal year, you should enter it into your plan with the most accurate estimate of the expense that you can manage. It doesn’t matter if it’s imperfect – it’s much better to have something in your budget than nothing.

Examples include event expenses known in advance (e.g., block room booking, travel, meals, booth expenses, printing, agencies, etc.); a digital campaign with an estimated spend-per-day ceiling; technology and data subscriptions; contractor retainers, and so on.

Planned expenses may be large enough that you have to raise a PO and negotiate price and payment terms, or they may be small or fast-moving enough that they are charged to a credit card without a PO or contract.

Planned expense buckets

You may plan an aggregate cost for a group of expenses and reserve a budget for them. In Planful’s budget tracker , we call this an expense bucket. In this context, we use expense buckets to estimate the cost of a set of expenses for which it may not be possible – or a good use of time – to estimate the line-by-line costs for each individual expense.

For example, you might budget an amount for travel every month even though you don’t know the precise make-up of taxi rides, train fares, airfares, and car mileage that will come in. Such expenses will likely be charged to credit cards – maybe even paid by cash – and won’t be explicitly in the marketing plan with line-by-line precision. When you see them as individual expenses, they will already be committed or even reconciled, and they should be charged to the marketing budget you reserved for them as they come in.

Unanticipated Marketing Expenses

No one likes unplanned marketing expenses, but they happen all the time. We normally become aware of these expenses when we receive our finance report. What’s unpleasant about these costs is that they are:

• unplanned by definition
• often already charged and accounted for the first time you see them

It makes a lot of sense to try to understand your surprise-expense run rate if you can. If you don’t know what it is, look at some historical data and try to find expenses like this: accounting reclassifications (for example,  an expense is moved into your budget from another department); corporate allocation you didn’t know about; someone did something bad with the corporate credit card, and you have to eat the cost.

You may encounter surprise expenses from unforeseen issues. You may have unexpected PR costs from a crisis management project (e.g., customer, press, investor, and analyst communications after a data breach), for example, or you may have to make a major mid-year adjustment in your plan due to some major external factor, like a natural disaster.

Disputed expenses

When you get a surprise expense, you may conclude it doesn’t belong in your budget. This is a common occurrence, and it pays to be diligent – you have enough to worry about paying another department’s bills.

Corporate and departmental budget allocations are frequent candidates to be disputed. You need to track the expense in your budget as if it will be paid by you until finance agrees to move it.

Moving expenses

You planned it. You know what date the invoice arrived and how much it was for. You know it belongs to marketing. So why can’t you find it in the expense report?

It’s important to understand how your finance team accounts for expenses. Otherwise, you may find that expenses you thought hit your budget in one time period were applied in a different time frame. This can lead to inadvertent underspending or overspending, even if you’ve diligently tracked your expenses before interlocking with the finance team.

Tracking Expenses

The figure below is the unified expense model . It shows when different types of expenses may be initiated during the expense life cycle, the evidence for their existence, and the phases they will occupy until they are reconciled. It’s possible that your expenses won’t work exactly like this. That will depend on the specific policies and practices adopted by your company.

What is important is that you and your marketing team understand how your expenses are handled for your company’s marketing budget. If you understand this well, you can plan and execute your spending accurately to achieve your marketing goals.

Conclusion: Accurate Marketing Expense Management

Diligent, accurate expense management is impossible in a spreadsheet. In Planful, our marketing expense tracker is highly automated, clearly visible, and easily editable.

Contact us to learn how you can get your marketing expenses under control and maintain a real-time, accurate, team-sourced understanding of the state of your budget and the complete life-cycle of your diverse expenses.

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A marketing budget is an estimate of how much money a business plans to spend on marketing its products or services during a given timeframe, such as a year. Costs that should be taken into account when creating a marketing budget include marketing software , staff payroll, ad campaigns, signage, promotional materials, events, digital assets and potentially third-party services.

Your marketing budget is both informed and dictated by your marketing strategy, which should determine your business's goals, customer base, market niche, branding and preference. Failing to create a marketing budget could lead your business to overspend and affect your broader business budget , or underspend and deprive your business of the exposure it needs to establish a strong customer base. But it's also important to remember that this is an estimate and can be adjusted as your business evolves.

Determine your marketing goals

Your goals are the results you want your marketing efforts to yield. The end goal of all marketing is to grow your business in some way by increasing sales, but you want to try to be more specific. Examples of marketing goals could be to drive traffic to your company website or increase engagement rates on social media posts. The more specific your goals, the more clear your strategy — and the spend associated with it — will be.

Think like your target audience

Your target audience is the group of people most likely to transact with your business. You'll want to tailor your marketing outreach to best reach this group and convert them into paying customers. Performing market research can help you narrow down who this group is, as well as how they discover and interact with businesses like yours. Whether it's through social media, email, direct mail, commercials, search engines, or other means, knowing what platforms you'll incorporate in your marketing plan will help you estimate the costs associated with them.

Consider your revenue

Many businesses base their marketing on a percentage of their gross revenues. The benefit of this approach is that your marketing budget will rise along with your sales. However, keep in mind that marketing generates sales — not the other way around. That means a startup business likely needs to budget a disproportionate percentage for marketing compared to its sales.

For new businesses, look at your sales projections for your first year in business — this should be part of your business plan . For more established businesses, you can leverage real data and financial reports to determine your revenue and how much of your overall budget you can allocate to future marketing based on your goals.

The average marketing budget in 2022 was 9.5% of a company's overall revenue. [0] Gartner . How CMOs Are Spending Their Marketing Budget – and What It Means for You . View all sources This figure will vary across businesses based on size, industry, revenue and more. There are also plenty of low-cost and even free advertising tools to help keep your marketing costs down.

Use budgeting templates and tools

Free business budget templates abound to help you calculate your marketing budget. You can also consult SCORE's annual marketing budget template , as well as the organization's other small-business resources. If you're looking for something more automated, budgeting software is designed to help you manage, track and forecast budgets. However, before you pay for standalone software, first check with your accounting software . Many of these platforms include budgeting and forecasting tools and since they're already tracking your business's other financial information, you don't have to worry about transferring data between programs.

A version of this article originally appeared on Fundera, a subsidiary of NerdWallet.

On a similar note...

What Makes a Winning Marketing Budget? Examples and Insights

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In the world of marketing, your budget is the fuel that powers your business efforts, allowing you to reach new audiences and accomplish your goals. If your marketing budget is well-planned and executed, it gives you the resources to tackle any challenge thrown your way.

But before you start allocating funds, it’s essential to answer two crucial questions: What are you going to spend money on, and why?

Even if these questions sound simple, they make the difference between a thriving marketing campaign and a failed one.

In this article, we’ll explain what a marketing budget is, share average marketing budgets for startups and small businesses, and provide marketing budget examples to demonstrate how to calculate it easily. Plus, you’ll get useful tips for your marketing budget allocation.

Ready? Let’s explore all the essential aspects of your marketing budget management.

What is a marketing budget?

A marketing budget refers to the amount of money you aside to cover all your marketing expenses. This includes expenses related to advertising, promotion, public relations, market research, branding, and other marketing activities.

The marketing budget is an important tool to design and execute effective marketing campaigns and achieve your marketing objectives. What’s more, it allows you to keep your marketing efforts aligned with the overall business strategy .

How to calculate your marketing budget? 5 easy steps to marketing budget management.

Marketing budget management involves the process of planning, tracking, and optimizing expenses. Obviously, this ensures that you use the allocated budget effectively and efficiently to achieve your marketing goals.

The latest findings from the CMO Survey’s 29th edition reveal that in 2022, companies allocated a record-breaking 13.8% of their total budget to marketing . While this figure can serve as a useful benchmark for a marketing budget example, calculating the marketing budget can vary depending on the size of your business, the industry, the target market, and the marketing goals. Regardless of the factors involved, here are five essential steps how to calculate your marketing budget:

Step 1: Determine your overall revenue goal.

Looking for ways to avoid overspending or underspending? Well, before you can calculate your marketing budget, you should get clear about the overall revenue goal.

To clarify, your revenue goal represents the amount of money you expect to earn during a specific period. It helps you understand the amount of revenue you need to generate to cover expenses and make a profit.

By setting a revenue goal, you can then determine how much to spend on marketing. And this immediately calls for considering factors such as the cost of acquiring new customers, retaining existing ones, and promoting your brand.

Let’s get specific. Suppose your marketing team aims to acquire 300 new customers within a set timeframe. In this case, the essential question is: “What is the required budget to acquire 300 new customers?”

To determine this, you must first identify the cost of acquiring one new customer. This figure is calculated using two essential metrics: cost per lead and conversion rate. By examining these data points, you can identify the precise amount to invest in your marketing efforts.

Which leads us to step number two.

Step 2: Calculate the cost per lead.

The cost per lead (CPL) is a straightforward and effective metric that indicates the marketing budget required to generate a new lead . CPL is an important number on your marketing budget calculator as it can provide valuable insights into the effectiveness of your efforts.

To determine your CPL, simply divide your total marketing expenses by the number of leads you have obtained.

Total marketing budget ÷ Number of new leads = Cost per lead

For instance, let’s say you spend $1,000 on social media marketing, $1,500 on email marketing, and $5,000 on promotional brand events to acquire new leads. This means your total spend for marketing equals $7,500 ($1,000 + $1,500 + $5,000). Suppose you acquired 100 leads after spending this budget. Thus, your cost per lead is $75 (7,500 ÷ 100 = 75).

This formula is also helpful to calculate the CPL for each of your marketing channels. Eventually, it enables you to make informed decisions on how to distribute your marketing budget across channels, depending on which ones yield the most cost-effective leads.

To put it in context, suppose you run an e-commerce business and want to measure the effectiveness of your email marketing campaign. You spend $2,000 on email marketing in a month and generate 20 leads as a result. To calculate your CPL, divide your marketing spend by the number of leads ($2,000÷20), which gives you a cost per lead of $100.

By monitoring your CPL over time, you can determine whether your email marketing campaign is becoming more or less cost-effective. And as a result, adjust your strategy accordingly. For instance, if you find that your CPL is steadily increasing, you may need to refine your targeting or messaging to boost the performance of your campaign. Alternatively, if your CPL is decreasing, you may want to allocate more resources and capitalize on the campaign’s cost-effectiveness.

Step 3: Calculate your conversion rate.

Simply generating leads isn’t enough. Your ultimate target is to convert them into paying customers to achieve your business goals.

Calculate your conversion rate by dividing the number of sales by the number of leads you have generated.

Total number of conversions ÷ Total number of leads X 100% = Conversion rate

For instance, if you generated 500 leads and converted 10 into customers, your average conversion rate is 5% (10 customers/500 leads X 100% = 5%).

If you don’t calculate the average conversion rate for your company, setting up your marketing budget may prove challenging. Why? Because without such data, you may be wasting resources on ineffective marketing strategies.

After determining your cost per lead and conversion rate, you can finalize calculating your marketing budget.

Step 4: Determine how many leads you need.

To reach your new customer goal, you need to determine the number of leads your company requires. You can know this number by dividing your new customer goal by your average conversion rate. This approach provides a clear picture of how many leads your company needs to reach its new customer goal. Here’s the formula:

The number of your new customer goal ÷ The average conversion rate = The number of leads you will need.

So, 30 new customers ÷ 2% x 100 = 1500 leads

This means that if your average conversion rate is 2%, you’ll need to generate at least 1500 new leads in order to hit your target of 30 new customers.

Step 5: Monitor and track expenses.

Regularly track and analyze your marketing spend to ensure that you’re staying within budget and maximizing ROI. Monitor your campaigns’ performance and make necessary adjustments to your budget allocation to optimize results. Without a doubt, you should allocate more funds towards high-performing channels and decrease spending on low-performing channels.

Budget considerations for startups and small businesses: 10 essential items to go into your list.

Now that you’ve learnt how to calculate a marketing budget, we can look into the marketing budget categories.

So, what’s in a marketer’s budget?

A variety of expenses should go into your marketing budget breakdown to reflect the unique needs and goals of your business:

• Branding and design: Creating a logo, designing marketing materials, and developing a brand identity.
• Website development: Building a website, hosting fees, and ongoing maintenance and updates.
• Content creation: Creating blog posts, social media content, and other marketing materials.
• Advertising: Paid social media ads, Google AdWords, and other forms of online advertising.
• Public relations: Establishing connections with journalists and media outlets and producing press releases and other materials for the media.
• Events: Attending trade shows, hosting events, and other forms of in-person marketing.
• Marketing technology: Leveraging marketing technology such as automation tools, customer relationship management (CRM) software, email marketing software, and project management tools to achieve marketing goals.
• Employee salaries, benefits, and training: Paying your marketing team, if you have one, and providing benefits such as health insurance and retirement plans. Plus, investing in the team’s continuous development and growth.
• Research and analysis: Conducting market research, analyzing customer data, and tracking the health of your marketing campaigns.
• Unexpected costs: For example, a sudden change in market conditions or a new competitor entering the market may require a shift in marketing strategy. You may even need additional marketing spending to stay competitive. That’s why it’s important to have some flexibility in the budget to accommodate these unexpected costs and changes. One way to plan for unexpected costs is to set aside a contingency fund within the marketing budget. This fund can be used to cover unforeseen expenses or to invest in new marketing opportunities that may arise.

Marketing budget allocation best practices

Next, we’ve handpicked marketing budget allocation tips and strategies to help you navigate this challenging process more easily. Follow these tips to enhance the impact of your marketing budget and achieve your business goals more efficiently.

Prioritize your channels.

Who is your target audience? What are your business objectives? Answer these questions to be able to prioritize your marketing channels. Focus on the channels that offer the best potential to reach your target audience and drive the desired results.

Consider your customer journey.

Wondering how to allocate your marketing budget effectively? Consider the various stages a potential customer goes through before making a purchase, including awareness, consideration, decision, and post-purchase evaluation. For example, you may allocate more funds towards acquisition tactics at the top of the funnel. Alternatively, if you want to build loyalty, you may concentrate on retention tactics at the bottom of the funnel.

Plan for contingencies.

Allocate a portion of your budget towards unforeseen circumstances and unexpected expenses. This is your lifeboat to ensure that you have the resources to pivot your marketing strategy if needed.

Use technology to simplify budget management.

Technology isn’t going anywhere. It’s becoming more and more integrated in our daily lives, marketing budgets are following suit, with more and more resources being channeled towards digital efforts.

Investing in marketing technology, such as a marketing automation tool, can be a game-changer. It can help you determine attribution , cost per lead, and conversion rates, as well as generate and nurture leads. By the way, you can also utilize marketing budget management software to automate tracking, enhance analysis and improve overall efficiency. What’s more, a versatile project management tool such as Teamly can help to improve team communication and streamline work processes.

Make digital advertising your first choice.

Note that traditional advertising, such as TV and radio ads and billboards, can be more expensive than digital advertising. Therefore, they may not be effective for startups and small businesses trying to reach a more targeted audience.

Be flexible.

Remember, the marketing budget is not a fixed number. It can be adjusted depending on the performance of your marketing efforts and the needs of your business. Be prepared to adjust your budget allocation based on changing business conditions, emerging trends, and other factors.

Startups vs. small businesses: Is the marketing budget different for them?

Marketing budget allocation for small businesses and startups can differ in several ways, primarily due to differences in resources, goals, and target markets.

Small businesses may have more established customer bases and a clearer understanding of their target markets. Therefore, a small business marketing budget may focus on retaining customers and building loyalty through customer engagement, referrals, and personalized marketing efforts.

In contrast, startups may have limited resources and may be looking to establish themselves in a new market. So, a startup marketing budget allocation may be geared towards acquiring new customers through awareness-building and lead-generation tactics.

An average marketing budget for small businesses.

Small businesses typically allocate around 7-8% of their total revenue to marketing efforts.

An average marketing budget for startups.

Startups should allocate 10-11% of their overall revenue towards marketing efforts.

Here’s a startup marketing budget example. If a startup has an annual revenue of $500,000, its marketing budget would typically range between $50,000 to $55,000 to be able to establish brand awareness and attract customers.

Pro tip : Consider the industry in which your business operates

One factor that can greatly impact your marketing budget is the industry in which your business operates. B2B companies are advised to allocate a marketing budget between 2% and 5% of their revenue. However, for B2C companies, the recommended proportion is typically higher, ranging from 5% to 10%. This is because B2C businesses often require a larger investment in marketing channels, such as social media, influencer marketing, and other forms of advertising, in order to effectively target various customer segments.

A marketing budget example for small businesses and startups

Here’s an example of a marketing budget breakdown:

Total marketing budget: $50,000

• Includes blog content creation, social media management, and SEO
• Includes Google Ads and social media advertising
• Includes email newsletter creation and distribution
• Includes trade shows, conferences, and community events
• Includes print ads and local radio spots
• Set aside for unexpected costs or opportunities that may arise throughout the year.

Of course, the specific allocation of a marketing budget will vary depending on the business’s goals, target audience, and industry. This is just a single example to give you an idea of how a small business might divide up its marketing budget.

Marketing budget allocation: Why one size doesn’t fit all

Start looking into the topic of allocating a marketing budget, and you’ll see that examples are ample. In fact, businesses take a wide variety of approaches.

Some companies, like Casper, invest heavily in marketing and sales, allocating as much as 43% of their revenue to these efforts. Others, like Kohl’s, take a more conservative approach, spending only 4.9% of their revenue on marketing. Under Armour, falls somewhere in the middle, dedicating 10.5% of its revenue to marketing.

But what does it all mean? Your choices will vary widely depending on the company and the industry you operate in.

Direct-to-consumer brands, for example, often require a larger investment in marketing to build brand awareness and reach new customers. However, even within this category, there is significant diversity in marketing spend. While Casper spends a high proportion of its revenue on marketing, numbers are different for other e-commerce companies. Stitch Fix, for example, allocates only 3% of its revenue to marketing.

This illustrates that there is no one-size-fits-all approach to allocating marketing budgets. Instead, companies must carefully consider their specific industry, business goals, and target audience when determining their marketing budgets.

One factor that contributes to the diversity of marketing budget examples is the increasing importance of digital marketing channels. Look around. With the rise of social media and other digital platforms, businesses have more options than ever before for reaching their target audience . However, this also means that companies must be strategic in their approach to digital marketing. They should carefully select the channels that are most effective for their business.

A marketing budget is like a farmer’s seed fund. Just as a farmer invests in high-quality seeds to yield a bountiful harvest, a business invests in marketing to generate a strong return on investment.

The amount of investment and the allocation of resources will determine the size and quality of the yield. You simply need a deep understanding of different marketing budget examples, careful planning, and effective management of your budget. Soon, the investment in marketing will bear fruit and bring in a healthy crop of leads, conversions, and profits.

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The Ins and Outs of Marketing Costs: A Comprehensive Guide

• Uncategorized
• Marketing Costs

Are you feeling overwhelmed as you navigate the labyrinth of marketing costs while trying to expand your reach and growth? If so, you’re not alone. Many HR and workforce technology companies, like yours, investing in demand generation marketing face a similar challenge. This comprehensive guide is designed to help you, by clarifying intricate details associated with marketing budgets, giving you a firm grasp of your business’s marketing financial scope.

Understanding the complexities of marketing costs is crucial, especially in today’s cluttered market. With a multitude of variables, from business scale to competition level, the costs associated with a marketing firm, specific marketing strategies, and even direct product promotion, the landscape is undoubtedly complex. Yet, it’s crucial to remember—as Henry Ford wisely put it—“stopping advertising to save money is like stopping your watch to save time”.

Before we delve deeper into our guide, let’s quickly outline some key points around marketing costs:

• Marketing budgets usually range between 5% and 30% of a company’s total revenue.
• The cost varies based on factors like size of your company, industry, marketing firm’s experience, and specific marketing strategies.
• Different promotional strategies like personal selling or website, and digital presence affect the costs distinctly.

In the following sections, we at GrowthMode Marketing will provide a comprehensive breakdown of these cost factors along with essential insights into planning your marketing budget effectively. This information will empower you to make savvy marketing decisions that can elevate your brand awareness, credibility, and trust, propelling you towards your revenue goals. Let’s get started!

Understanding the Importance of a Marketing Budget

To start, let’s delve into why a marketing budget is a vital asset for your business. A marketing budget gives you a clear roadmap to achieve your marketing goals. It helps you identify the resources you need and how to allocate them effectively. Without it, you might find yourself shooting in the dark, unsure of where your marketing dollars are going and whether they’re generating returns.

The Role of a Marketing Budget in Achieving Business Goals

A marketing budget plays a pivotal role in shaping your business’s future. It serves as a financial blueprint, guiding you on how much to invest in different marketing activities to meet your business goals. Whether you’re planning to launch a new product or aiming to expand your market reach, your marketing budget will help you determine the practical steps to achieve these objectives.

Moreover, a well-planned marketing budget ensures that your marketing efforts align with your sales targets. It keeps your marketing spending in check, preventing it from spiraling out of control and eating into your revenue. In short, a marketing budget is not just about controlling costs – it is about strategically investing in your business’s growth.

How Marketing Budgets Vary Based on Business Size, Sales, and Competition

Marketing budgets are not one-size-fits-all. They vary significantly based on various factors such as the size of your business, annual sales, and the level of competition in your industry. For instance, a small company might allocate between 2% and 5% of its revenue on marketing, while larger businesses might spend between 9% and 12% of their annual budget on marketing activities.

In highly competitive industries, businesses might devote a higher percentage of their sales towards marketing. New companies, in particular, may invest as much as 50% of their sales on introductory marketing programs in their first year. Conversely, some businesses might simply try to match their direct competitors’ spending.

At GrowthMode Marketing , we understand that every business is unique. We take into account your specific business size, industry, and growth goals to help you determine a marketing budget that fits your needs. By understanding the importance of a marketing budget and how it varies, you can better plan your marketing costs and drive your business towards success.

How to Determine Your Marketing Budget

Determining your marketing budget is a crucial step in establishing a successful marketing strategy. Here at GrowthMode Marketing, we guide you through various approaches to set a budget that aligns with your unique business needs and goals.

Using Percentage of Sales to Determine Marketing Budget

One of the most popular methods for calculating a marketing budget is by allocating a specific percentage of your sales revenue. On average, businesses allocate between 9% and 12% of their annual budget to marketing. However, this percentage can range from as low as 1% to as high as 50% depending on factors such as business size, industry, and competition. This approach ensures that your marketing budget grows or shrinks in sync with your sales revenue, preventing your marketing costs from spiralling out of control.

The Dollar Approach to Setting a Marketing Budget

A flat dollar amount is another straightforward method for setting your marketing budget. This approach is particularly useful for small businesses or businesses with one-time marketing expenses, such as a trade show or a specific public relations campaign. Here, you set your marketing budget based on what the company can afford rather than sales revenue. This method requires a good understanding of your financial capabilities and careful planning to ensure the budget aligns with your marketing goals.

Matching Competitors’ Marketing Spend

Benchmarking your marketing budget against your competitors’ spend is another effective approach. This method helps you to maintain competitive parity and keeps your business in line with industry norms. However, consider the size and scale of your competitors. If you’re a small business competing with a multinational corporation, matching their marketing costs might not be feasible. Hence, always factor in your business’s revenue when using this method.

Using Marketing Plan Objectives to Set Your Budget

Your business’s growth goals and marketing objectives can also guide your marketing budget. If your business is aiming for aggressive growth and expansion, you may need a comprehensive, multi-faceted marketing strategy, which often requires a larger investment. Similarly, launching a new product or service necessitates increased advertising and publicity, leading to a higher marketing budget.

In conclusion, there’s no one-size-fits-all approach to determining your marketing budget. It requires a clear understanding of your business goals, industry norms, and financial capacity. Here at GrowthMode Marketing , we understand these complexities and provide expert guidance to help you navigate your marketing costs effectively. By investing in a strategic marketing budget, you’re investing in your company’s growth and success.

Breakdown of Marketing Costs

Understanding the breakdown of marketing costs is vital for planning your budget and strategizing your marketing efforts. Let’s delve into various components of marketing costs.

Costs Associated with Website Design and Maintenance

Your website is often the first point of contact for potential customers, making it a crucial part of your marketing strategy. The costs associated with website design and maintenance largely depend on the complexity of your site and whether you choose to hire an external team or do it in-house. There’s a time investment if you choose to do this yourself. It might be more cost-effective to hire professionals and free up your time for strategic tasks.

Social Media Advertising Costs

Social media marketing can be a powerful tool to engage your audience and increase brand awareness. The costs can vary significantly, depending on factors like the number of social platforms targeted, the complexity of campaigns, and the level of engagement required. For instance, the cost of hiring a social media marketing agency could range from $1,000 to $20,000 per month.

Online and Traditional Media Advertising Costs

Online and traditional media advertising costs are another significant part of your marketing budget. If you hire a full-service advertising agency, they typically charge based on time spent on the campaign or by commission based on your annual advertising expenditure. If you manage the campaign internally, you’ll pay the media provider for space, and possibly for hiring designers and copywriters.

Costs of E-newsletters and Video Marketing

Sending e-newsletters and engaging in video marketing are effective ways to reach your audience. The costs for these can vary depending on the size of your email list, the complexity of your campaigns, and the frequency of your emails. A small to mid-sized business could expect to pay between $9,000 to $10,000 per month for comprehensive email marketing services.

Staff Training and Other Marketing-Related Costs

If you hire an internal marketing team, the employee costs can be significant. Large businesses may retain several specialists such as a marketing manager, content manager, graphic designer, email marketing associate, press officer, and social media manager. For businesses on a tighter budget, hiring freelance specialists can provide a lower-cost alternative.

In conclusion, understanding these costs can help you better strategize your marketing efforts and allocate your budget effectively. At GrowthMode Marketing , we’re committed to delivering value for every dollar you invest in us. We understand the intricacies of marketing costs and can help you optimize your marketing budget to drive growth.

The 4Ps of Marketing and Their Impact on Marketing Costs

As we delve deeper into the realms of marketing costs, it’s crucial to discuss the 4Ps of marketing – Product, Price, Place, and Promotion. These four elements constitute the marketing mix, and each has its unique costs associated with it. Let’s break down each of these and see how they can impact your marketing budget.

Product: How Product Type and Life Cycle Affect Marketing Costs

The type of product or service you’re offering can significantly influence your marketing costs. Whether you’re selling a tangible product like clothing, an intangible one like software, or a service like consulting, the common factor is that they all aim to satisfy a customer need or demand.

If your product is new to the market, you might need to invest more in marketing to establish your brand and gain loyal customers. This could involve hiring a PR agency or investing in expensive television advertising. On the other hand, established products might not require as much marketing investment.

Moreover, products have a life cycle. The marketing costs for a product in the introduction stage will differ from those in the maturity or decline stage. Understanding your product’s life cycle helps to strategically allocate your marketing budget.

Price: The Role of Pricing in Marketing and Its Associated Costs

The price of your product or service is another crucial factor that can impact your marketing costs. High-value products might allow for a higher marketing budget, while low-value products may require a more frugal approach.

However, it’s crucial to remember that pricing is often the first impression a customer has of your product’s quality. If you need to change that perception, you might have to invest more in marketing to reposition your product in the market.

Place: Costs Associated with Distribution and Online Presence

The ‘Place’ component of the marketing mix refers to where the customer will make a purchase and how you’ll get the product in front of the customer. This could involve costs related to distribution, website development, hiring salespeople, or opening physical stores.

It’s also important to consider how a customer can access your product. For instance, if you need a website with a shopping cart facility, this will add to your marketing costs.

Promotion: Costs of Various Promotion Strategies

The final ‘P’ stands for Promotion, which encompasses all the activities needed to communicate your product to your target audience. These activities might include advertising, public relations, direct marketing, sales promotions, and more.

The promotion strategies will vary depending on the product’s stage in the life cycle. Different promotional strategies come with different costs, so it’s important to choose the ones that align best with your budget and business goals.

In conclusion, understanding the 4Ps of marketing helps in effectively managing and optimizing your marketing costs. At GrowthMode Marketing , we leverage our expertise to help you navigate these costs and develop a robust marketing strategy that drives growth while keeping costs in check.

Case Studies: Marketing Spend of Well-Known Companies

In marketing, it’s often beneficial to learn from the strategies of successful companies. Let’s have a look at some well-known companies and their approach to marketing costs.

Salesforce’s Marketing Spend

Salesforce, a leading CRM platform, provides an excellent example of how investing in marketing can drive business growth. Salesforce spends an impressive 46% of its revenue on sales and marketing . This substantial investment has resulted in a consistent 25% annual revenue growth for the company. Salesforce’s strategy demonstrates that a well-planned and executed marketing investment can yield significant returns.

Google’s Marketing Spend

Google, one of the world’s most recognized brands, also invests heavily in marketing. While specific figures are not readily available, it’s clear that Google’s marketing strategy involves a mix of online advertising, content marketing, social media outreach, and more. Google’s success showcases the importance of using multiple marketing channels to reach a broad audience and achieve business objectives.

Microsoft’s Marketing Spend

Microsoft, a global technology giant, is another company that prioritizes marketing. They invest in a diverse range of marketing channels, including traditional advertising, digital marketing, and events. While the exact percentage of their revenue dedicated to marketing isn’t public knowledge, it’s evident that Microsoft understands the value of marketing in driving sales and maintaining their industry-leading position.

Mindbody’s Marketing Spend

Mindbody, a rapidly growing business in the field of business analytics, invested heavily in sales and marketing, dedicating around 40% of their revenue to these efforts. This investment paid off as the company experienced significant growth, and within five to eight years, they went from having about 300 employees to being sold to SAP for 4 billion.

These case studies underline the importance of investing in marketing. At GrowthMode Marketing , we believe that a well-planned and executed marketing strategy can significantly contribute to your company’s growth. We are here to help you determine the most effective way to allocate your marketing budget to achieve your business objectives.

Tracking and Reviewing Your Marketing Costs

After determining your marketing budget and implementing your marketing strategy, the next crucial step is to regularly track and review your marketing costs. This will ensure that your spending aligns with your budget and allows you to make necessary adjustments based on the performance of your marketing campaigns.

Importance of Regularly Reviewing and Adjusting Your Marketing Budget

One of the critical aspects of managing marketing costs is the regular review and adjustment of your marketing budget. As your campaigns progress, keep a close eye on your costs and assess how they compare to your initial budget. This way, you can quickly identify any discrepancies and make necessary changes to stay on track.

At GrowthMode Marketing , we understand the importance of this process. By reviewing your marketing budget quarterly and annually, you can ensure that your projections align with your actual spending. This continuous monitoring and refining of your marketing efforts will allow you to generate more accurate budgets over time, aiding in the effective allocation of resources.

How to Accurately Assess Return on Investment from Marketing Campaigns

A critical aspect of tracking and reviewing your marketing costs involves assessing the return on investment (ROI) from your marketing campaigns. This assessment involves measuring key performance indicators (KPIs) such as website visits, lead generation, conversion rates, and customer acquisition costs.

It’s important to remember, however, that the ROI of marketing can vary widely and that marketing is a long-term investment. It’s about building brand awareness, establishing credibility, and nurturing relationships with potential customers. These efforts translate into revenue gradually, not overnight.

As such, it’s also important to listen to your customers and understand their journey with your brand. For example, asking them how they learned about you and what compelled them to choose your product or service over others can provide invaluable insights into the effectiveness of your marketing efforts.

In conclusion, tracking and reviewing your marketing costs is a vital process that helps ensure your marketing budget is being used effectively. At GrowthMode Marketing , we’re committed to helping our clients make informed decisions based on measurable results. We believe in the importance of regular reviews, adjustments, and the accurate assessment of ROI to drive growth.

Conclusion: Maximizing Your Marketing Budget for Optimal Results

In the end, it all comes down to this: your marketing budget is an investment in your business’s future , not just an expense. As we’ve discussed throughout this guide, understanding marketing costs and knowing how to budget and prioritize is crucial in choosing the right marketing strategies and partners.

The key to maximizing your marketing budget lies in strategic planning, constant re-evaluation, and smart investments. For instance, Sidharth Kumar, director of product marketing at Exoprise Systems , recommends de-prioritizing underperforming channels and redirecting your resources towards proven strategies and new, promising ones. Applying the 70-20-10 rule when budgeting for them can be a great starting point.

Besides that, investing in content repurposing and updating, as suggested by Charlie Southwell, marketing director and SEO specialist at Let’s Talk Talent , can help you maximize the value from your marketing budget. Content that remains valuable for a long time and can be repurposed in multiple formats offers a high return on investment.

At GrowthMode Marketing , we take pride in helping our clients make the most of their marketing budgets. We offer a range of digital marketing services that can be customized to achieve your marketing goals within your budget. We’re not just a marketing firm; we’re your strategic partners, dedicated to helping you get better results.

It’s not just about spending money, it’s about investing wisely. As Henry Ford once said, “stopping advertising to save money is like stopping your watch to save time.” With the right partner, your marketing costs can become valuable investments that yield significant returns, drive growth, and propel your business forward.

To learn more about how we can help you maximize your marketing investment and drive high growth, contact us or explore our services . Together, we can turn your marketing costs into a powerful engine for growth.

For further reading, check out our articles on marketing firm costs and growth marketing programs .

• GrowthMode Marketing

At GrowthMode, we combine the unique discipline of growth marketing and the evergreen principles of traditional marketing to develop integrated strategies and measurable programs that help businesses drive growth where it matters most to their vision. We help our B2B clients focus on their specific goals and ensure that their investment is aligned with their broader strategic vision.

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Making the Business Case for Your Marketing Budget

• Christine Moorman
• Jennifer Veenstra

How CMOs can move beyond short-term metrics and convince their colleagues that long-term growth requires patience.

Chief marketing officers are reporting increased pressure to prove the impact of marketing spending. But too often this means a focus on short-term metrics, like sales revenue, instead of longer-term efforts like brand building. To achieve their long-term strategic objectives, CMOs must work on building the business case with their CFOs and other peers.  The authors offer 10 actions that will help marketing leaders build the patience, trust, and confidence that long-term growth and value are on the horizon.

Scrutiny over marketing budgets is a common experience for most CMOs. In fact, as reported in the August 2021 CMO Survey , pressure to prove the impact of marketing efforts is substantial and rising, with 59% of marketing leaders reporting increased pressure from CEOs and 45% experiencing pressure from CFOs.

• Christine Moorman is the T. Austin Finch, Sr. Professor of Business Administration, Fuqua School of Business, Duke University. She is founder and director of The CMO Survey .
• JV Jennifer Veenstra is the executive leader of Deloitte’s Global CMO client experiences with 20+ years of consulting experience in market strategy and customer experience. Jennifer focuses her work on customer transformation especially as it pertains to the human experience and insights on the changing role of the CMO.

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Home Marketing Marketing Budget: The Complete Guide

Marketing Budget: The Complete Guide

You know you need to get your brand’s message out there.

You even have some ideas for how to do it.

But how do you know which ideas are the best ideas?

And how much should you even spend?

It sounds like you need a marketing budget .

What’s in This Guide?

This guide covers everything you need to put together an effective marketing budget to ensure your company’s sustained growth:

• Why is it important to spend on marketing?
• What is a marketing budget?
• Why is a marketing budget important?
• Aligning your marketing budget with your business goals
• Brand vs product-specific marketing costs
• How to calculate your marketing budget
• How to create your marketing budget
• Final considerations for your marketing budget

Let’s dive in.

Why is it Important to Spend on Marketing?

Marketing is essential to build brand awareness and increase company revenue. Without investing in marketing, you’re relying on grassroots word of mouth to grow your brand, which, while possible, can take a very long time.

Plus, chances are your competitors are investing in their marketing efforts. If you aren’t at least keeping up with them, you’re losing both market share and time, as it’ll be harder to reclaim that market share later on.

What is a Marketing Budget?

A marketing budget is the total money allocated to growth and promotion-related efforts over a defined period, such as one month, one quarter, or one year. These efforts can include the following:

• Website design and development
• PPC ad campaigns
• Social media campaigns
• Email marketing campaigns
• Content creation for content marketing campaigns
• Backlink building
• Print, TV, radio, direct mail and other traditional campaign channels
• Employees and contractors working on marketing-related efforts
• Tools and software used for marketing-related efforts

The size and complexity of your marketing budget will vary by the size and complexity of your business.

Small businesses may have simpler marketing budgets with just a handful of employees or contractors creating a few blog posts for a content marketing campaign and promoting those posts with basic PPC and social media ads.

Large businesses may have much more complex marketing budgets spanning multiple departments or divisions, each with different department-specific business goals that tie back to your broader business’ growth targets.

Why is a Marketing Budget Important?

Having a marketing budget is hugely important for several reasons.

1. You know exactly how much you can spend

If you don’t have a budget, how do you or your employees know how much to spend?

Let’s say you sell a subscription-based product where the average lifetime value of one customer is $2,000. You tell your marketing team to generate more customers, but you don’t tell them how much to spend. Come month-end, your team tells you they signed up 100 new customers worth $200,000 to your business, and it only cost $100,000.

That’s awesome, except each customer only generates $500 in revenue in their first month, so you just spent $100,000 to generate $50,000 in Month 1 revenue, and now you can’t make payroll next week.

2. You can properly size your marketing spend

As a corollary to the above, having a marketing budget lets you properly size that budget to optimise for your business’ goals. That way, you can find the sweet spot where you’re growing at the right pace while remaining solvent.

If your budget is too small, you may fall short of growth targets and/or lose market share to competitors.

If your budget is too big, you may have to cut back elsewhere to avoid going under.

3. You’re forced to prioritise your marketing efforts

Between PPC ad campaigns, social media ads, paid sponsorships and promotions, traditional print ads and other strategies, there are a lot of different ways you can spend to grow your brand.

But if you know you only have $5,000 per month to invest in a single channel, you’re forced to prioritise one channel above all others. A tool like   TrueNorth  can help you make that decision.

Aligning your Marketing Budget with your Business Goals

Your marketing team is hard at work spending their budgeted allocation to build your company’s brand and generate new customers.

But what if that isn’t what they’re doing?

Or, more specifically, what if that isn’t what they’re doing directly ?

Think about your company’s sales funnel for a second. Yours probably looks something like this:

Now think about what your marketing team is doing and where in the funnel they’re operating.

They should be trying to generate as many customers as possible, but are they instead thinking in terms of qualified leads, traffic, or impressions?

Let’s look at two basic scenarios to illustrate this point. In both scenarios, your company is promoting your awesome email marketing course, which you sell for $1,200.

In Scenario A, your marketing team is running a PPC ad campaign to maximise traffic by targeting keywords like “why use email marketing” at $10 cost per click. They have $15,000 to spend and generate 1,500 visits to their target page, which leads to 15 new customers (1% conversion rate) with $1,200 revenue per customer.

In total, they spent $15,000 and generated $18,000 in revenue for a 20% ROI.

In Scenario B, your marketing team is running a PPC ad campaign to maximise customer conversions by targeting buyer-focused keywords like “best email marketing course” at $20 cost per click. They have $15,000 to spend and generate just 750 visits to their target page, but those 750 visits turn into 25 new customers (3.3% conversion rate) with the same $1,200 revenue per customer.

In total, they spent $15,000 and generated $30,000 in revenue for a 100% ROI.

The marketing team in Scenario A was able to generate twice as much traffic, but the marketing team in Scenario B was able to generate much more revenue for the same ad spend because they were targeting customers further down in their sales funnel.

This doesn’t mean you should always target customers already in the buying phase of their journey. Maybe targeting customers at the top-level awareness stage of the sales funnel gives you the best ROI because they’re less expensive to acquire and your email marketing efforts are convincing.

To make the most of your marketing budget and generate the highest possible ROI, your marketing team must think in terms of your business’ goals.

Brand vs Product-Specific Marketing Costs

At any given time, your company is marketing itself at two different levels:

• General brand awareness and visibility
• Product-specific promotion and lead generation

These two types of marketing are complementary, and an effective marketing budget considers both.

1. General brand awareness and visibility

Spend some of your marketing efforts on general brand awareness. If your company sells B2B training courses, like the email marketing course example above, you want to spend money promoting your brand’s overall expertise and authority. There are a ton of different forms this level of marketing can take:

• Sponsorships
• Guest blogging or podcast appearances
• Traditional TV and print ads
• Display ads and native advertising
• Branded social media hashtag campaigns

These marketing efforts prop up your entire company, which has indirect benefits on revenue generated by your specific products.

Though not universally the case, frequently, these types of brand awareness marketing activities have fixed monthly budgets because they’re ongoing with more indirect efforts.

But just because these campaigns are more indirect and don’t directly promote specific products doesn’t mean you can’t (or shouldn’t) try to track their ROI, though it can be more difficult. Monitor referral traffic, on-site engagement and email sign-ups to measure the value of your brand awareness efforts.

2. Product-specific promotion and lead generation

One level deeper than general brand awareness is product-specific promotion. If your company sells B2B training courses, this is the money you spend promoting a specific course to generate more customers and revenue directly.

While product-specific promotional efforts can have global effects propping up your whole brand, those benefits are secondary to the primary goal of generating more customers and revenue through increased sales of the specific product being promoted.

Product-specific marketing campaigns have a different feel than general brand awareness campaigns:

• PPC ad campaigns for specific product-related keywords
• Paid influencer promotions featuring your product
• Giveaways of free product for trusted brands in your industry to review
• Content marketing campaigns with solution-focused blog posts and tutorials

These types of marketing efforts have one goal: Generate more sales of your specific product.

These types of product-specific marketing activities usually have variable budgets. That doesn’t mean you spend different amounts every month, but rather that your company’s product offerings are more dynamic than your brand itself. If your company is releasing a new or updated product, you may want to increase marketing spend for that product to generate buzz and momentum at launch. Over the following weeks or months, maybe your company has another product to promote or is releasing an update of an existing product, and you want to focus marketing spend there instead.

How to Calculate your Marketing Budget

Broadly speaking, there are two common ways to set marketing budgets:

• Benchmark budgets
• Zero-based budgets

One is significantly better than the other.

1. Benchmark budgets

Benchmark budgets are bottom-up budgets, meaning they assign spend based on a bottom-line number. Examples of benchmark budgets are the following:

• 12% of revenue
• 12% of revenue after expenses (“Profit-First” budgeting)
• Fixed budget every month, quarter, etc.

Benchmark budgets are common because they’re safe and easy, but they give little consideration to your business’ goals or growth targets.

It’s like training for a marathon by running 15 miles each week. It’s certainly better than running five miles each week, but is it enough training to finish in under four hours? I guess you’ll find out come race day.

2. Zero-based budgets

Zero-based budgets are top-down budgets, meaning they work backwards from your business goal to determine how much you need to spend.

For our marathon trainer, that means working backwards from your target finishing time to determine your average pace and the number of miles you need to run each week to improve to that pace.

This approach is more purposeful and gives you the best chance of hitting your goal.

A zero-based marketing budget begins with your TrueNorth metric ; the one metric, that if increased, will achieve your business’ goal.

Let’s revisit our email marketing course example above. Let’s say your goal is to generate $600,000 in revenue over the next 12 months. With zero-based budgeting, you work backwards from that goal:

• Your goal is to grow revenue by $600,000 in 12 months.
• At $1,200 in revenue per customer, that’s 500 new customers.
• Assuming a 50% gross profit target, that’s a target acquisition cost of $600 per customer.

Depending on the specific marketing tactics you plan to use, there are a lot of different ways to reach that $600 per customer target. Let’s go back to Scenarios A and B above.

For the marketing team in Scenario A trying to generate new customers with a PPC ad campaign targeting keywords like “why use email marketing,” they know their campaign converts leads into customers 1% of the time. If they want to hit their $600 target customer acquisition cost with a 1% conversion rate, they can’t spend more than $6 per click.

For the marketing team in Scenario B trying to generate new customers with a PPC ad campaign targeting keywords like “best email marketing course,” they know their campaign converts leads into customers 3.3% of the time. If they want to hit their $600 target customer acquisition cost with a 1% conversion rate, they can’t spend more than $20 per click.

If you don’t know which campaign ideas have the best ROI yet, I recommend using a tool like   TrueNorth  to track all of your campaign ideas and record their results in a centralised place so you can hone in on your best campaigns and grow your business faster.

How to Create your Marketing Budget

Creating your marketing budget is a little more involved than just earmarking dollars for different costs or campaigns. You’ll want to focus on these five steps:

• Determine your business’ objective and its True North metric
• Understand your sales funnel
• Quantify your operational costs
• Factor in all product-related promotional costs
• Measure and track ROI

Let’s take a more in-depth look at each.

1. Determine your business’ objective and its True North metric

Every solid marketing budget starts with the top-line business goal. What is success to your business?

Once you know what success means for your business, you can determine your True North metric; the one metric that, if increased, will achieve that goal.

This initial step is crucial because everything after it should always tie back to that objective. If your marketing plan and budgeted expenses don’t move the needle for your True North metric, should you be doing them?

2. Understand your sales funnel

Your sales funnel describes how you move visitors through the various stages of the buying process to become revenue-generating customers.

It should cost less money to generate general prospects or site visitors who are at the top of the funnel — further away from making a purchase — and haven’t become qualified leads yet.

Conversely, it should cost more to generate highly-qualified leads who are lower in the sales funnel and ready to buy.

Your goal should always be to optimise your sales funnel by putting the right campaigns, marketing materials, content, and sales pitches in front of the right visitors or leads depending upon where they are in the buying journey.

If you do this successfully, you can know two crucial pieces of information about your sales funnel:

• The cost to acquire a prospect, visitor or lead at each stage.
• The conversion rate of each stage into revenue-generating customers.

Now you can maximise your marketing budget’s performance by creating campaigns that target potential customers at the stage of the funnel with the highest ROI.

3. Quantify your operational costs

The amount you pay for each click in a CPC ad campaign is just one marketing-related cost. You may also have operational costs that are more fixed in nature that your company needs to budget for regardless of the size of your brand or product-specific campaigns:

• Employee/contractor salaries and related expenses
• Email marketing tools  and CRM software
• Website domain registration and hosting
• SEO-related tools and expenses

Whether you spend $20,000 or $200,000 on an ad campaign, you’ll have to account for these mostly-fixed expenses just to keep your marketing teams’ lights on.

4. Factor in all product-related promotional costs

When gearing up for a new product’s promotional launch, it’s easy to forget any expenses you incurred in the prior months preparing for launch.

• Market research
• Focus groups to generate customer feedback
• Testing to develop the perfect campaign messaging

All of these expenses factor into your total marketing cost even though they may not directly show up on your active campaign’s budget.

5. Measure and track ROI

Your business should always be looking to improve your marketing ROI to get a better bang for your buck. A key part of that is frequent measuring and tracking of campaign performance.

Six Sigma is a set of techniques that focus on process improvement, and an integral part of Six Sigma methodology is this process of continuous refinement and quality improvement known as the   DMAIC Process :

• Define  the True North metric and KPI that tie your marketing team’s efforts to your business’ goals.
• Measure the defined metrics while your campaign is running.
• Analyse the data generated from the measurement process.
• Improve  your campaigns by tweaking the performance of underperforming campaigns, landing pages or email copy, or look to cut underperforming campaigns altogether to focus on high-ROI activities.
• Control  this iterative improvement by documenting the process and making it part of your marketing team’s day-to-day workflow.

Final Considerations when Creating your Marketing Budget

Before you rush off to create your company’s marketing budget, there are a couple of final considerations to make:

• Your company’s marketing maturity and your True North channel
• The role of remarketing

1. Your company’s marketing maturity and your True North channel

Your marketing budget should be agile and responsive, so it can react to what is (and isn’t) working. Overall, the idea is to do more of what generates the best results and less of what doesn’t.

A key part of finding what works is identifying your True North channel; the channel that generates the best results.

There are three phases of   marketing maturity  that your marketing team can use to figure out how to allocate marketing spend across various channels:

• Phase 1 : You’re looking for your core channel, which requires investing a small amount of your budget in a wide variety of channels to see what works.
• Phase 2 : You’ve found your True North channel, which means you can focus intensely on maximising your returns until they begin to diminish.
• Phase 3 : You’ve saturated your True North channel, which means you should slowly experiment with one or two other channels to diversify your efforts.

This is all a part of DMAIC continuous improvement process and is integral to your marketing team’s sustained success in an increasingly competitive landscape.

2. The role of remarketing

Remarketing lets you customise your message to speak directly to visitors who have seen your site before. Considering   97% of people  will visit your site without making a purchase, remarketing is an important and cost-efficient way of continuing the conversation with people who are familiar with your brand or product but haven’t pulled the trigger on a purchase yet.

Earlier we talked about how important it is to put the right campaigns, marketing materials, content, and sales pitches in front of the right visitors or leads depending upon where they are in the buying journey. Remarketing is an extension of that by putting personalised, targeted content in front of specific people. Plus, CPC rates for remarketing ads cost   half as much , as regular ads, and can convert   over 50% better .

Your marketing budget includes everything your company needs to spend on promotion-related activities and should always align with your business’ goals. If your top-line goal is to increase revenue, then your marketing budget should be created from the top-down to include the resources required to hit your revenue targets.

It’s also important to focus those resources on promotional activities and marketing channels that generate the highest ROI. If you don’t know what those activities and channels are, begin by experimenting with small marketing spend across a variety of channels to identify the big winners. If you do know what those activities and channels are, focus your efforts on maximising your returns until your results begin to diminish.

Above all else, remember that your company’s marketing efforts should be agile and responsive as you react to changes in performance in constant pursuit of the highest possible ROI.

We’re currently in the process of building TrueNorth, a marketing management system that helps marketing teams create adaptable plans, prioritise campaigns, and rally their teams around the marketing plan.

If you’re interested in joining our beta, you can join here . As a Venture Harbour reader, you’ll be jumped to the front of the beta queue.

Marcus Taylor is the founder of Venture Harbour. He’s also an early-stage investor, advisor & the youngest Patron of The Prince's Trust.

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How to Write a Business Plan: Step-by-Step Guide + Examples

Noah Parsons

24 min. read

Updated May 7, 2024

Writing a business plan doesn’t have to be complicated. 

In this step-by-step guide, you’ll learn how to write a business plan that’s detailed enough to impress bankers and potential investors, while giving you the tools to start, run, and grow a successful business.

• The basics of business planning

If you’re reading this guide, then you already know why you need a business plan . 

You understand that planning helps you: 

• Raise money
• Grow strategically
• Keep your business on the right track 

As you start to write your plan, it’s useful to zoom out and remember what a business plan is .

At its core, a business plan is an overview of the products and services you sell, and the customers that you sell to. It explains your business strategy: how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. 

A good business plan is much more than just a document that you write once and forget about. It’s also a guide that helps you outline and achieve your goals. 

After completing your plan, you can use it as a management tool to track your progress toward your goals. Updating and adjusting your forecasts and budgets as you go is one of the most important steps you can take to run a healthier, smarter business. 

We’ll dive into how to use your plan later in this article.

There are many different types of plans , but we’ll go over the most common type here, which includes everything you need for an investor-ready plan. However, if you’re just starting out and are looking for something simpler—I recommend starting with a one-page business plan . It’s faster and easier to create. 

It’s also the perfect place to start if you’re just figuring out your idea, or need a simple strategic plan to use inside your business.

Dig deeper : How to write a one-page business plan

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• What to include in your business plan

Executive summary

The executive summary is an overview of your business and your plans. It comes first in your plan and is ideally just one to two pages. Most people write it last because it’s a summary of the complete business plan.

Ideally, the executive summary can act as a stand-alone document that covers the highlights of your detailed plan. 

In fact, it’s common for investors to ask only for the executive summary when evaluating your business. If they like what they see in the executive summary, they’ll often follow up with a request for a complete plan, a pitch presentation , or more in-depth financial forecasts .

Your executive summary should include:

• A summary of the problem you are solving
• A description of your product or service
• An overview of your target market
• A brief description of your team
• A summary of your financials
• Your funding requirements (if you are raising money)

Dig Deeper: How to write an effective executive summary

Products and services description

This is where you describe exactly what you’re selling, and how it solves a problem for your target market. The best way to organize this part of your plan is to start by describing the problem that exists for your customers. After that, you can describe how you plan to solve that problem with your product or service. 

This is usually called a problem and solution statement .

To truly showcase the value of your products and services, you need to craft a compelling narrative around your offerings. How will your product or service transform your customers’ lives or jobs? A strong narrative will draw in your readers.

This is also the part of the business plan to discuss any competitive advantages you may have, like specific intellectual property or patents that protect your product. If you have any initial sales, contracts, or other evidence that your product or service is likely to sell, include that information as well. It will show that your idea has traction , which can help convince readers that your plan has a high chance of success.

Market analysis

Your target market is a description of the type of people that you plan to sell to. You might even have multiple target markets, depending on your business. 

A market analysis is the part of your plan where you bring together all of the information you know about your target market. Basically, it’s a thorough description of who your customers are and why they need what you’re selling. You’ll also include information about the growth of your market and your industry .

Try to be as specific as possible when you describe your market. 

Include information such as age, income level, and location—these are what’s called “demographics.” If you can, also describe your market’s interests and habits as they relate to your business—these are “psychographics.” 

Related: Target market examples

Essentially, you want to include any knowledge you have about your customers that is relevant to how your product or service is right for them. With a solid target market, it will be easier to create a sales and marketing plan that will reach your customers. That’s because you know who they are, what they like to do, and the best ways to reach them.

Next, provide any additional information you have about your market. 

What is the size of your market ? Is the market growing or shrinking? Ideally, you’ll want to demonstrate that your market is growing over time, and also explain how your business is positioned to take advantage of any expected changes in your industry.

Dig Deeper: Learn how to write a market analysis

Competitive analysis

Part of defining your business opportunity is determining what your competitive advantage is. To do this effectively, you need to know as much about your competitors as your target customers. 

Every business has some form of competition. If you don’t think you have competitors, then explore what alternatives there are in the market for your product or service. 

For example: In the early years of cars, their main competition was horses. For social media, the early competition was reading books, watching TV, and talking on the phone.

A good competitive analysis fully lays out the competitive landscape and then explains how your business is different. Maybe your products are better made, or cheaper, or your customer service is superior. Maybe your competitive advantage is your location – a wide variety of factors can ultimately give you an advantage.

Dig Deeper: How to write a competitive analysis for your business plan

Marketing and sales plan

The marketing and sales plan covers how you will position your product or service in the market, the marketing channels and messaging you will use, and your sales tactics. 

The best place to start with a marketing plan is with a positioning statement . 

This explains how your business fits into the overall market, and how you will explain the advantages of your product or service to customers. You’ll use the information from your competitive analysis to help you with your positioning. 

For example: You might position your company as the premium, most expensive but the highest quality option in the market. Or your positioning might focus on being locally owned and that shoppers support the local economy by buying your products.

Once you understand your positioning, you’ll bring this together with the information about your target market to create your marketing strategy . 

This is how you plan to communicate your message to potential customers. Depending on who your customers are and how they purchase products like yours, you might use many different strategies, from social media advertising to creating a podcast. Your marketing plan is all about how your customers discover who you are and why they should consider your products and services. 

While your marketing plan is about reaching your customers—your sales plan will describe the actual sales process once a customer has decided that they’re interested in what you have to offer. 

If your business requires salespeople and a long sales process, describe that in this section. If your customers can “self-serve” and just make purchases quickly on your website, describe that process. 

A good sales plan picks up where your marketing plan leaves off. The marketing plan brings customers in the door and the sales plan is how you close the deal.

Together, these specific plans paint a picture of how you will connect with your target audience, and how you will turn them into paying customers.

Dig deeper: What to include in your sales and marketing plan

Business operations

The operations section describes the necessary requirements for your business to run smoothly. It’s where you talk about how your business works and what day-to-day operations look like. 

Depending on how your business is structured, your operations plan may include elements of the business like:

• Supply chain management
• Manufacturing processes
• Equipment and technology
• Distribution

Some businesses distribute their products and reach their customers through large retailers like Amazon.com, Walmart, Target, and grocery store chains. 

These businesses should review how this part of their business works. The plan should discuss the logistics and costs of getting products onto store shelves and any potential hurdles the business may have to overcome.

If your business is much simpler than this, that’s OK. This section of your business plan can be either extremely short or more detailed, depending on the type of business you are building.

For businesses selling services, such as physical therapy or online software, you can use this section to describe the technology you’ll leverage, what goes into your service, and who you will partner with to deliver your services.

Dig Deeper: Learn how to write the operations chapter of your plan

Key milestones and metrics

Although it’s not required to complete your business plan, mapping out key business milestones and the metrics can be incredibly useful for measuring your success.

Good milestones clearly lay out the parameters of the task and set expectations for their execution. You’ll want to include:

• A description of each task
• The proposed due date
• Who is responsible for each task

If you have a budget, you can include projected costs to hit each milestone. You don’t need extensive project planning in this section—just list key milestones you want to hit and when you plan to hit them. This is your overall business roadmap. 

Possible milestones might be:

• Website launch date
• Store or office opening date
• First significant sales
• Break even date
• Business licenses and approvals

You should also discuss the key numbers you will track to determine your success. Some common metrics worth tracking include:

• Conversion rates
• Customer acquisition costs
• Profit per customer
• Repeat purchases

It’s perfectly fine to start with just a few metrics and grow the number you are tracking over time. You also may find that some metrics simply aren’t relevant to your business and can narrow down what you’re tracking.

Dig Deeper: How to use milestones in your business plan

Organization and management team

Investors don’t just look for great ideas—they want to find great teams. Use this chapter to describe your current team and who you need to hire . You should also provide a quick overview of your location and history if you’re already up and running.

Briefly highlight the relevant experiences of each key team member in the company. It’s important to make the case for why yours is the right team to turn an idea into a reality. 

Do they have the right industry experience and background? Have members of the team had entrepreneurial successes before? 

If you still need to hire key team members, that’s OK. Just note those gaps in this section.

Your company overview should also include a summary of your company’s current business structure . The most common business structures include:

• Sole proprietor
• Partnership

Be sure to provide an overview of how the business is owned as well. Does each business partner own an equal portion of the business? How is ownership divided? 

Potential lenders and investors will want to know the structure of the business before they will consider a loan or investment.

Dig Deeper: How to write about your company structure and team

Financial plan

Last, but certainly not least, is your financial plan chapter. 

Entrepreneurs often find this section the most daunting. But, business financials for most startups are less complicated than you think, and a business degree is certainly not required to build a solid financial forecast. 

A typical financial forecast in a business plan includes the following:

• Sales forecast : An estimate of the sales expected over a given period. You’ll break down your forecast into the key revenue streams that you expect to have.
• Expense budget : Your planned spending such as personnel costs , marketing expenses, and taxes.
• Profit & Loss : Brings together your sales and expenses and helps you calculate planned profits.
• Cash Flow : Shows how cash moves into and out of your business. It can predict how much cash you’ll have on hand at any given point in the future.
• Balance Sheet : A list of the assets, liabilities, and equity in your company. In short, it provides an overview of the financial health of your business. 

A strong business plan will include a description of assumptions about the future, and potential risks that could impact the financial plan. Including those will be especially important if you’re writing a business plan to pursue a loan or other investment.

Dig Deeper: How to create financial forecasts and budgets

This is the place for additional data, charts, or other information that supports your plan.

Including an appendix can significantly enhance the credibility of your plan by showing readers that you’ve thoroughly considered the details of your business idea, and are backing your ideas up with solid data.

Just remember that the information in the appendix is meant to be supplementary. Your business plan should stand on its own, even if the reader skips this section.

Dig Deeper : What to include in your business plan appendix

Optional: Business plan cover page

Adding a business plan cover page can make your plan, and by extension your business, seem more professional in the eyes of potential investors, lenders, and partners. It serves as the introduction to your document and provides necessary contact information for stakeholders to reference.

Your cover page should be simple and include:

• Company logo
• Business name
• Value proposition (optional)
• Business plan title
• Completion and/or update date
• Address and contact information
• Confidentiality statement

Just remember, the cover page is optional. If you decide to include it, keep it very simple and only spend a short amount of time putting it together.

Dig Deeper: How to create a business plan cover page

How to use AI to help write your business plan

Generative AI tools such as ChatGPT can speed up the business plan writing process and help you think through concepts like market segmentation and competition. These tools are especially useful for taking ideas that you provide and converting them into polished text for your business plan.

The best way to use AI for your business plan is to leverage it as a collaborator , not a replacement for human creative thinking and ingenuity. 

AI can come up with lots of ideas and act as a brainstorming partner. It’s up to you to filter through those ideas and figure out which ones are realistic enough to resonate with your customers. 

There are pros and cons of using AI to help with your business plan . So, spend some time understanding how it can be most helpful before just outsourcing the job to AI.

Learn more: 10 AI prompts you need to write a business plan

• Writing tips and strategies

To help streamline the business plan writing process, here are a few tips and key questions to answer to make sure you get the most out of your plan and avoid common mistakes .  

Determine why you are writing a business plan

Knowing why you are writing a business plan will determine your approach to your planning project. 

For example: If you are writing a business plan for yourself, or just to use inside your own business , you can probably skip the section about your team and organizational structure. 

If you’re raising money, you’ll want to spend more time explaining why you’re looking to raise the funds and exactly how you will use them.

Regardless of how you intend to use your business plan , think about why you are writing and what you’re trying to get out of the process before you begin.

Keep things concise

Probably the most important tip is to keep your business plan short and simple. There are no prizes for long business plans . The longer your plan is, the less likely people are to read it. 

So focus on trimming things down to the essentials your readers need to know. Skip the extended, wordy descriptions and instead focus on creating a plan that is easy to read —using bullets and short sentences whenever possible.

Have someone review your business plan

Writing a business plan in a vacuum is never a good idea. Sometimes it’s helpful to zoom out and check if your plan makes sense to someone else. You also want to make sure that it’s easy to read and understand.

Don’t wait until your plan is “done” to get a second look. Start sharing your plan early, and find out from readers what questions your plan leaves unanswered. This early review cycle will help you spot shortcomings in your plan and address them quickly, rather than finding out about them right before you present your plan to a lender or investor.

If you need a more detailed review, you may want to explore hiring a professional plan writer to thoroughly examine it.

Use a free business plan template and business plan examples to get started

Knowing what information to include in a business plan is sometimes not quite enough. If you’re struggling to get started or need additional guidance, it may be worth using a business plan template. 

There are plenty of great options available (we’ve rounded up our 8 favorites to streamline your search).

But, if you’re looking for a free downloadable business plan template , you can get one right now; download the template used by more than 1 million businesses. 

Or, if you just want to see what a completed business plan looks like, check out our library of over 550 free business plan examples . 

We even have a growing list of industry business planning guides with tips for what to focus on depending on your business type.

Common pitfalls and how to avoid them

It’s easy to make mistakes when you’re writing your business plan. Some entrepreneurs get sucked into the writing and research process, and don’t focus enough on actually getting their business started. 

Here are a few common mistakes and how to avoid them:

Not talking to your customers : This is one of the most common mistakes. It’s easy to assume that your product or service is something that people want. Before you invest too much in your business and too much in the planning process, make sure you talk to your prospective customers and have a good understanding of their needs.

• Overly optimistic sales and profit forecasts: By nature, entrepreneurs are optimistic about the future. But it’s good to temper that optimism a little when you’re planning, and make sure your forecasts are grounded in reality. 
• Spending too much time planning: Yes, planning is crucial. But you also need to get out and talk to customers, build prototypes of your product and figure out if there’s a market for your idea. Make sure to balance planning with building.
• Not revising the plan: Planning is useful, but nothing ever goes exactly as planned. As you learn more about what’s working and what’s not—revise your plan, your budgets, and your revenue forecast. Doing so will provide a more realistic picture of where your business is going, and what your financial needs will be moving forward.
• Not using the plan to manage your business: A good business plan is a management tool. Don’t just write it and put it on the shelf to collect dust – use it to track your progress and help you reach your goals.
• Presenting your business plan

The planning process forces you to think through every aspect of your business and answer questions that you may not have thought of. That’s the real benefit of writing a business plan – the knowledge you gain about your business that you may not have been able to discover otherwise.

With all of this knowledge, you’re well prepared to convert your business plan into a pitch presentation to present your ideas. 

A pitch presentation is a summary of your plan, just hitting the highlights and key points. It’s the best way to present your business plan to investors and team members.

Dig Deeper: Learn what key slides should be included in your pitch deck

Use your business plan to manage your business

One of the biggest benefits of planning is that it gives you a tool to manage your business better. With a revenue forecast, expense budget, and projected cash flow, you know your targets and where you are headed.

And yet, nothing ever goes exactly as planned – it’s the nature of business.

That’s where using your plan as a management tool comes in. The key to leveraging it for your business is to review it periodically and compare your forecasts and projections to your actual results.

Start by setting up a regular time to review the plan – a monthly review is a good starting point. During this review, answer questions like:

• Did you meet your sales goals?
• Is spending following your budget?
• Has anything gone differently than what you expected?

Now that you see whether you’re meeting your goals or are off track, you can make adjustments and set new targets. 

Maybe you’re exceeding your sales goals and should set new, more aggressive goals. In that case, maybe you should also explore more spending or hiring more employees. 

Or maybe expenses are rising faster than you projected. If that’s the case, you would need to look at where you can cut costs.

A plan, and a method for comparing your plan to your actual results , is the tool you need to steer your business toward success.

Learn More: How to run a regular plan review

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How to write a business plan FAQ

What is a business plan?

A document that describes your business , the products and services you sell, and the customers that you sell to. It explains your business strategy, how you’re going to build and grow your business, what your marketing strategy is, and who your competitors are.

What are the benefits of a business plan?

A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.

Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.

What are the 7 steps of a business plan?

The seven steps to writing a business plan include:

• Write a brief executive summary
• Describe your products and services.
• Conduct market research and compile data into a cohesive market analysis.
• Describe your marketing and sales strategy.
• Outline your organizational structure and management team.
• Develop financial projections for sales, revenue, and cash flow.
• Add any additional documents to your appendix.

What are the 5 most common business plan mistakes?

There are plenty of mistakes that can be made when writing a business plan. However, these are the 5 most common that you should do your best to avoid:

• 1. Not taking the planning process seriously.
• Having unrealistic financial projections or incomplete financial information.
• Inconsistent information or simple mistakes.
• Failing to establish a sound business model.
• Not having a defined purpose for your business plan.

What questions should be answered in a business plan?

Writing a business plan is all about asking yourself questions about your business and being able to answer them through the planning process. You’ll likely be asking dozens and dozens of questions for each section of your plan.

However, these are the key questions you should ask and answer with your business plan:

• How will your business make money?
• Is there a need for your product or service?
• Who are your customers?
• How are you different from the competition?
• How will you reach your customers?
• How will you measure success?

How long should a business plan be?

The length of your business plan fully depends on what you intend to do with it. From the SBA and traditional lender point of view, a business plan needs to be whatever length necessary to fully explain your business. This means that you prove the viability of your business, show that you understand the market, and have a detailed strategy in place.

If you intend to use your business plan for internal management purposes, you don’t necessarily need a full 25-50 page business plan. Instead, you can start with a one-page plan to get all of the necessary information in place.

What are the different types of business plans?

While all business plans cover similar categories, the style and function fully depend on how you intend to use your plan. Here are a few common business plan types worth considering.

Traditional business plan: The tried-and-true traditional business plan is a formal document meant to be used when applying for funding or pitching to investors. This type of business plan follows the outline above and can be anywhere from 10-50 pages depending on the amount of detail included, the complexity of your business, and what you include in your appendix.

Business model canvas: The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea.

One-page business plan: This format is a simplified version of the traditional plan that focuses on the core aspects of your business. You’ll typically stick with bullet points and single sentences. It’s most useful for those exploring ideas, needing to validate their business model, or who need an internal plan to help them run and manage their business.

Lean Plan: The Lean Plan is less of a specific document type and more of a methodology. It takes the simplicity and styling of the one-page business plan and turns it into a process for you to continuously plan, test, review, refine, and take action based on performance. It’s faster, keeps your plan concise, and ensures that your plan is always up-to-date.

What’s the difference between a business plan and a strategic plan?

A business plan covers the “who” and “what” of your business. It explains what your business is doing right now and how it functions. The strategic plan explores long-term goals and explains “how” the business will get there. It encourages you to look more intently toward the future and how you will achieve your vision.

However, when approached correctly, your business plan can actually function as a strategic plan as well. If kept lean, you can define your business, outline strategic steps, and track ongoing operations all with a single plan.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• Use AI to help write your plan
• Common planning mistakes
• Manage with your business plan
• Templates and examples

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2021 Guide to Managing Business Marketing Expenses

This is a guide to marketing spending for SMEs and how you can utilize virtual cards to optimize this important function of your business.

The article is a guide to marketing spending for SMEs and how you can utilize virtual cards to optimize this important function of your business.

What is Marketing Spending?

Marketing spending is the amount of money the marketing team spends to promote the brand awareness of the business. Promotional activities include social media, content marketing, paid advertising, SEO, trade shows, and more. 

A number of factors to consider when determining your marketing budget are the type of industry, size of business and which growth stage your SME is at. For instance, if your business is just getting started, you may be spending more on marketing to build brand awareness among your consumers.

How Much Should You Be Spending on Marketing? (Source: Nuphoriq )

As a start-up, you want to be on top of your expenses and understand how marketing impacts your overall budgeting. You can get started by thinking about some concrete and measurable ways to determine what worked and what did not – also known as Key Performance Indicators (KPIs) for you to determine the effectiveness of your marketing campaigns.

If you don’t have marketers in place, you as the small business owner would have to get your hands dirty by learning how to develop a marketing budget and we’re here to help you get started with simple marketing spend template:

Marketing budget plan estimates (Source: Microsoft Office Templates )

The rows represent your marketing expense type, and the columns help you to track how many times the particular expense is incurred and how much money is spent on that. A pro-tip to making this template work for you is to update it constantly whenever a marketing spend is incurred, so you don’t have to wait until the end of the month to find out that you’ve overspent or underspent on marketing.

What are the Different Expenses in the Marketing Department?

Once you have your marketing spend template in place, it’d be helpful to develop a pie chart with a percentage indicated for the respective channels to provide you a bird-eye's view of your marketing spending. 

Some examples of expenses in the marketing department include, but are not limited to:

• Software: Includes payments for print media platforms used like Adobe, Canva, etc. Also includes subscription rates for marketing automation software which enables businesses to automate their marketing functions including campaign creation, market segmentation, and response analysis.
• Personnel: Includes monthly wages for your sales and marketing team. Also includes expenses incurred outsourcing marketing work to freelancers.
• Advertising: Includes cover ads in print media and online venues, broadcast time, radio time, and direct mail advertising.
• Content Creation: Content varies from blog posts to graphic designs. Includes SEO and digital marketing work, photography and videography, and expenses incurred with engaging a third-party marketing agency to develop advertising campaigns.

Especially for SMEs, digital marketing channels are gaining traction when we speak of marketing spending ( Read: Why SMEs Do Better Digital Marketing Than The Biggest Brands, Jan 2021, Forbes ). Having an online presence whether through your website or social media is in itself a 24/7 sales machine to reach out to your business. Also, today’s consumers are more empowered and more informed to seek out reviews and information about your product online before the purchasing happens.

What is Zero-Rating Advertising Cost?

A supply of service in Singapore attracts Goods & Services Tax (GST) unless it qualifies for zero-rating relief as an international service under section 21(3) of the GST Act. A list of advertising and related services that qualify for zero-rating provisions is as follows:

Credit score to qualify for the card? Typically requires very good credit. Some cards are available to those with lower credit scores.

Source: IRAS e-Tax Guide | GST: Guide for Advertising Industry (Third Edition), Jun 2021, Inland Revenue Authority of Singapore

Virtual Cards for Marketing Spend

You want to have control over your budget but at the same time, you don’t want to micromanage your marketing team because they’re the experts here and you trust them with their spending on the business. Virtual cards would be just the solution for you to manage and track your marketing spending. 

As many cards, as you want to have, you get to set the budgets on each of them and switch them on and off with only a click! Plus, you can also assign the cards to specific users so a particular person on your team is responsible for managing the card.

While one company credit card being circulated around appears to be the most sensible and easiest to track, there’s a whole lot of work at the end of the month when it comes to reconciling the marketing expenses. Vis-a-vis to using a virtual card for each advertising campaign, each client, or each type of expense. 

Before we go on and on, we also want to highlight that every purchase you make through the virtual card(s) is visible from one dashboard, in real-time, and on any internet device you have handy on you. Forget working spreadsheets and data entry throughout the month. You only need to export!

How to Choose the Right Virtual Card for your Marketing Strategy  

Virtual cards have practically changed the way banking is being done. There’s a sea of virtual card providers for you to choose from, but you want to spend some time considering the criteria that matter to your business and find one that meets your business needs.

Some key factors to consider when choosing the right virtual card for your marketing strategy include:

• Type of payment card: Single payment like a gift card? Linked to an existing card? Cards with dedicated balances?
• Ease of opening an account: Can it be done online? Or have to do it at a physical banking branch?
• Exchange rates and fees: Currency exchange and other fees need to be laid out in a clear and transparent manner.
• Electronic security : Security measures that the virtual card provider has (e.g. 3-D Security enabled, sufficient security certification which is easily checkable).
• Integration with other services : Ability to connect banking directly to accounting software.

Tips for Tracking your Marketing Spending

Before we go, we want to leave a trail of cookie-crumble tips for SMEs to track your marketing spending:

Tip #1: Track impact on both revenue and leads.

Venture beyond vanity figures like the number of likes, site traffic, and leads generated via your blog! Going back to marketing Return On Investments (ROIs), consider clear metrics that directly tie to your business value like the lead-to-customer ratio, the average cost per lead, and average lead value. Marketing is no cost centre and you want to build a strong business case for your marketing spending.

Tip #2: Review and adapt the strategy.

While planning is important, agility is the name of the game – horizontally across every other industry and vertically across every business function. As you stay true to the values your business stands for, it is also key for your marketing teams to adapt your messages to reflect the realities on the ground to get to your customers.

Tip #3: Pick the right service providers.

Marketing alone has so many aspects – paid advertising, social media, email marketing, content marketing, lead generation, market research/intelligence, etc. Don’t be lazy and opt for a one-stop shop! As it’s been emphasized, invest some time finding the right service providers. Spend a little more time and effort in the look-out, so you make sure the money you spent on marketing will not be a lose-out 😉

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• Choosing the Right Channels for Your Marketing Plan
• Improving Website Visibility in Search Results
• Optimizing Content for Search Engine Visibility
• How to Develop SMM Campaigns
• Marketing Research
• Primary research methods
• Secondary research methods
• Quantitative and qualitative data analysis
• Business Analysis
• Assessing marketing performance
• Identifying industry trends
• Analyzing customer needs
• Strategic Planning
• Creating a competitive analysis
• Defining a target audience
• Developing a marketing strategy
• Marketing Goals
• Setting marketing objectives
• Defining market segments
• Choosing the right channels
• Marketing Budget
• Managing marketing expenses
• Calculating marketing costs
• Developing a budget plan
• Marketing Execution
• Implementing integrated marketing strategies
• Deploying digital marketing tactics
• Creating marketing campaigns
• Search Engine Optimization (SEO)
• Using keywords and search terms effectively
• Optimizing content for SEO
• Improving website visibility in search results
• Social Media Marketing (SMM)
• Analyzing the success of SMM campaigns
• Developing SMM campaigns
• Engaging with followers on social media platforms
• Pay-Per-Click (PPC) Advertising
• Choosing the right keywords and targeting options
• Creating PPC campaigns
• Measuring PPC performance and ROI
• Content Optimization and Measurement
• Analyzing content performance data and metrics
• Optimizing content for search engine visibility
• Measuring the impact of content on customer engagement
• Content Strategies and Tactics
• Integrating content into other marketing channels
• Developing content strategies for different channels and platforms
• Choosing the right tactics for content promotion and distribution
• Content Creation and Distribution
• Developing content for different channels and platforms
• Promoting content to reach potential customers
• Creating engaging content for target audiences
• Social Media Platforms and Strategies
• Choosing the right social media platforms for business objectives
• Developing social media strategies for different channels
• Integrating social media into other marketing channels
• Social Media Content and Engagement
• Creating engaging social media content
• Social Media Ads and Promotion
• Measuring ROI of social media campaigns
• Choosing the right targeting options
• Creating social media ads
• Campaign Planning and Execution
• Measuring the effectiveness of integrated campaigns
• Launching integrated campaigns
• Planning integrated campaigns
• Data Analysis and Optimization
• Analyzing data from integrated campaigns
• Optimizing campaigns for better performance
• Monitoring customer interactions across channels
• Integrated Strategies and Tactics
• Developing integrated marketing strategies
• Integrating digital, content, and social media strategies
• Choosing the right tactics for integrated campaigns
• Brand Identity and Positioning
• Building a strong brand reputation
• Creating a brand identity
• Defining a brand position in the market
• Brand Messaging and Promotions
• Creating promotional campaigns to boost brand awareness
• Measuring the impact of brand promotions on customer engagement
• Developing brand messaging strategies
• Brand Experiences and Engagement
• Engaging with customers on different channels
• Creating engaging brand experiences
• Analyzing customer feedback to improve brand experiences
• Creative Strategies
• Integrating creative campaigns into other marketing channels
• Developing creative marketing strategies
• Choosing the right tactics for creative campaigns
• Marketing Plan
• Calculating Marketing Costs

Learn how to calculate the costs of a marketing plan and budget, and how to manage and track your marketing expenses.

Tracking and Managing Marketing Expenses

Setting up a system for monitoring expenses, using software to track expenses, and allocating a budget for each marketing activity are all important steps for ensuring your marketing plan is successful. Setting up a system for monitoring expenses is key to managing your budget effectively. This will help you track your spending, so you can identify areas where you may be overspending or underutilizing your budget. You can then make adjustments as necessary to ensure you are getting the most out of your marketing budget.

Using software to track expenses can also be beneficial. Software tools can help you generate reports that track spending on each marketing activity, allowing you to easily identify areas where more resources may be needed. Software can also provide insights into how your marketing activities are performing, allowing you to adjust your strategy if necessary. Finally, allocating a budget for each marketing activity is important. This will help ensure that you are investing the right amount of money in each activity, rather than overspending or underutilizing your budget.

Other Considerations

Taking into account the seasonality of an industry can help marketers identify peak times to invest more in marketing campaigns, as well as times of the year where it may be more cost-effective to reduce spending. Additionally, understanding the target audience is essential when calculating marketing costs. Knowing who the target audience is can help marketers determine the most effective channels for reaching that audience, as well as the types of content and messaging that will resonate. Another important factor to consider when calculating marketing costs is the cost of staffing. Depending on the size of the marketing team, there may be additional costs associated with hiring, training, and maintaining staff members.

Tools for Tracking and Managing Marketing Expenses

Project management software is an excellent choice for tracking and managing marketing expenses. This type of software allows you to keep track of all your projects, tasks, timelines, and budgets in one place. It also offers reporting capabilities so you can easily measure the success of your projects. Budgeting software is another useful tool for tracking and managing marketing expenses.

This type of software allows you to easily track your budget, plan future expenses, and identify areas where you can save money. Additionally, budgeting software can be used to generate reports and analyze your spending patterns. In addition to project management and budgeting software, there are other tools that can be used to track and manage marketing expenses. For example, spreadsheet programs such as Microsoft Excel or Google Sheets can be used to create reports, track spending, and analyze data.

You should also consider factors like labor costs associated with executing your plan. In addition to the cost of each component, you should also factor in any additional costs that may be associated with implementing your plan. This could include things like software or hardware costs, or any other costs associated with launching your plan. It's important to take all of these factors into account when calculating your total marketing costs.

Once you have estimated the cost of each component of your plan, you can then begin to manage and track your expenses. This includes keeping track of all of the expenses related to each component of your plan, as well as any additional costs associated with launching your plan. Tracking these expenses will help you stay within budget and ensure that you are getting the most out of your marketing budget. By taking the time to accurately calculate your marketing costs, you can ensure that you are making the most of your budget and getting the most out of your marketing plan.

Components of a Marketing Plan and Budget

This includes advertisements in print publications, radio, television, and online. Public relations is another important component of marketing costs. This involves developing relationships with the press and working to gain publicity for your business. Social media is also an important part of any marketing plan and budget.

This includes creating and managing accounts on various social media platforms such as Facebook, Twitter, Instagram, and YouTube. Market research is another essential component of a marketing plan and budget. Market research involves collecting data about customer demographics, preferences, buying habits, and other factors that can help you create effective campaigns. Website design and development is also an important part of any marketing plan and budget.

This includes developing an attractive website that is easy to use and navigate. Promotional materials are also an important part of a marketing plan and budget. This includes brochures, flyers, business cards, postcards, and other materials that can be used to promote your business. Event marketing is also an essential part of any marketing plan and budget.

This involves organizing events or promotions to generate interest in your business or products. Finally, SEO (Search Engine Optimization) is an important component of any marketing plan and budget. SEO involves optimizing your website for better search engine rankings so that customers can more easily find your business online. In conclusion, creating and managing a marketing plan and budget requires an understanding of the various components involved, such as calculating marketing costs, tracking and managing expenses, and using the right tools for the job. It is important to recognize that there are other considerations to take into account when planning a marketing budget.

Jamal Tilbury

Infuriatingly humble webaholic. Devoted analyst. Devoted travel expert. Hardcore twitter practitioner. Unapologetic internet expert. Avid bacon aficionado.

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Integrating Content into Other Marketing Channels

• Integrating Digital, Content, and Social Media Strategies
• Choosing the Right Keywords and Targeting Options for PPC Advertising
• Identifying Industry Trends

Analyzing the Success of SMM Campaigns

• Optimizing Campaigns for Better Performance
• How to Manage Marketing Expenses
• Exploring Quantitative and Qualitative Data Analysis for Effective Marketing Strategies

Promoting Content to Reach Potential Customers

• Creating a Brand Identity
• Assessing Marketing Performance: A Comprehensive Overview
• Creating Engaging Content for Target Audiences
• Creating Engaging Brand Experiences
• Creating Content Strategies for Different Channels and Platforms
• Analyzing Data from Integrated Campaigns: A Comprehensive Guide
• Optimizing Content for SEO
• Analyzing Customer Feedback to Improve Brand Experiences
• Deploying Digital Marketing Tactics
• Choosing the Right Tactics for Integrated Campaigns
• Setting Marketing Objectives: A Comprehensive Overview
• Launching Integrated Campaigns
• Creating marketing campaigns that engage and inform
• Market Segmentation: Defining Your Target Audience
• Developing Brand Messaging Strategies
• Creating Promotional Campaigns to Boost Brand Awareness
• Building a Strong Brand Reputation
• Creating Engaging Social Media Content
• Choosing the Right Tactics for Creative Campaigns
• Defining a Brand Position in the Market
• Measuring the Effectiveness of Integrated Campaigns
• Developing Integrated Marketing Strategies
• Analyzing Customer Needs for Marketing Strategy and Business Analysis
• Creating a Competitive Analysis
• Defining Your Target Audience
• Integrating Creative Campaigns into Other Marketing Channels
• Engaging with Customers on Different Channels
• Analyzing Content Performance Data and Metrics
• Choosing the Right Social Media Platforms for Business Objectives
• Implementing Integrated Marketing Strategies
• Secondary Research Methods: Everything You Need to Know
• Creating Social Media Ads: A Comprehensive Overview
• Measuring the ROI of Social Media Campaigns
• Engaging with Followers on Social Media Platforms
• Creating PPC Campaigns
• Measuring PPC Performance and ROI
• Monitoring Customer Interactions Across Channels
• Integrating Social Media Into Other Marketing Channels
• Using Keywords and Search Terms Effectively
• Choosing the Right Targeting Options for Social Media Marketing & Promotion
• Developing Creative Marketing Strategies
• Measuring the Impact of Brand Promotions on Customer Engagement
• Developing a Marketing Strategy
• Choosing the Right Tactics for Content Promotion and Distribution
• Creating a Budget Plan
• Creating Content for Different Channels and Platforms
• An Introduction to Primary Research Methods
• Planning Integrated Campaigns
• Creating Effective Social Media Strategies for Different Platforms
• Measuring the Impact of Content on Customer Engagement

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More From Forbes

How much should you spend on marketing.

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By Thomas Minieri, artist, author, entrepreneur | CEO of Minieri & Company | founder of the Lemonade Maker® brand.

When determining your marketing budget, there are several key factors to consider. Marketing encompasses everything from branding and website development to communications and sales. It is a big header, and each component needs to be well thought out to ensure your entire marketing system is firing on all cylinders.

Branding Overview

Building a brand is not just for large companies. It is the foundation of every business of any size and in any industry. Your brand is your first impression; it is comprised of the visuals that represent your products or services combined with the words used to communicate those products and services. Everything from logo design to sales copy is what makes your brand unique. A successful brand conveys credibility, while an underfunded brand creates doubt. One of my favorite sayings sums up the vibe of branding: How you do anything is how you do everything. Does your brand image tell prospects that you are professional, or does it send the message that you are low budget and disorganized? Branding is about perception.

Branding Spend

Start off with a professionally designed logo, a defined color palette, a selection of unique photos or carefully selected stock images and well-written sales copy. With a focus in marketing on return on investment (ROI), it might be challenging or impossible to track the effectiveness of many branding efforts. I consider branding an investment that makes every other part of your marketing strategy more effective. A poor brand hurts everything while a great brand helps everything. A business owner may spend anywhere from $1,000 to $5,000 for initial startup branding and additional funds for ongoing updates and further development.

Advertising Overview

Any effort that directly promotes your business to prospects can be considered advertising. Options may include running paid ads on social media or search engines, posting on social media, email marketing campaigns, direct mail campaigns, billboards, radio spots, outside salespeople or networking events. Your advertising budget should also include the cost to create any content that will be utilized in the actual advertisements as well as the cost of managing advertising campaigns.

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Advertising Spend

My rule of thumb with respect to advertising spend is to have two budgets in mind: one to sustain current revenues and another for robust growth. If you want to maintain current revenue amounts, then 5% to 10% of sales allocated toward advertising may suffice. If you want rapid growth, then you may need to push that number higher, possibly to 20% or more depending on the industry and type of business you operate. A startup business should commit to a fixed number for their advertising spend as their revenue may be too low to utilize a percentage of sales as a gauge. For many small businesses, $1,000 per month is a reasonable minimum advertising spend.

Communications

I call communications "marketing insurance." If you are going to spend money on branding and advertising, then make sure leads are managed properly. The first step to achieving this is to streamline the methods by which prospects can connect with you. Having too many methods (such as telephone, email, chat, texting and messaging) can be overwhelming. I prefer the good old-fashioned telephone. While I also like chat for website communication, I strive to get the prospect on the phone as soon as possible. Personal correspondence with prospects is crucial in many industries.

Communication Spend

The costs for proper communication can vary between industries. Spend what needs to be spent to ensure you are not losing leads due to unresponsiveness. Failure to manage your communication systems properly can be fatal to a business as money is being wasted on advertisements that are not turning into sales. Another aspect of communications and "marketing insurance" is customer service. The last thing you want is for a new customer to ask for a refund due to poor service.

Sales is under the marketing umbrella as the prospect has not yet purchased. The prospect saw your credible brand promoted in an advertisement, then they visited your website to learn more and now they are ready to make a purchase!

Sales Spend

Like communications, your sales spend will vary between industries. The goal here is to develop professional sales presentations or sales methods that clearly explain in detail the benefits of your offerings in a manner that encourages the prospect to make a purchase. Graphic design slideshows can work well and may help your team stay focused when presenting. Keep them fun and interesting. Videos and other media are also smart investments to improve sales results. If you rely on a sales team, they should be properly dressed, polite, knowledgeable and able to clearly communicate your products or services. Make sure they have the tools they need to succeed.

Customer Acquisition Cost

I tend to summarize marketing spend into one primary data point: customer acquisition cost (CAC). This is the total cost to get one new customer and includes your branding efforts, advertising spend, designer and marketing team salaries, and sales process costs. To find this number, simply add up all the above expenses and divide by the number of customers you acquired in that same timeframe. It makes for good business practice to evaluate your CAC annually and work to get that number lower each year without diminishing your brand. Avoid cutting your marketing budget, rather work to refine your marketing effectiveness. Starving your business of crucial marketing components is never a smart decision.

A well-thought-out marketing plan can make or break a company. It can also separate a company that is stuck in a revenue plateau from one that is soaring to new heights. I took my first company, a service-based studio business, from a small underfunded startup to a bustling national franchise in just six years. My CAC was about $250 per customer in years one and two. As our brand and marketing systems were perfected, I was able to lower that number to $110 per customer. This improved profitability and made my brand attractive to prospective franchisees.

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The complete guide to managing marketing expenses

Published on January 23, 2024

Most marketing leaders have virtually no finance experience. The benefits of a well-balanced budget don't get you out of bed in the morning. Growth and great branding are what you're here for.

But this can be a problem. Because as a marketing manager or CMO, you're in charge of  a lot of company money. And spending wisely is a key part of the job .

We're here to make that job a little bit easier. At the very least, you should leave here today with a clear gameplan to take control of your marketing expenses . And you may even enjoy yourself along the way.

Time to get started. If you'd rather just grab a great budget template and take care of this all yourself, here you go:

Marketing expenses: a definition

We’re going to talk about marketing and advertising expenses for your taxes in more detail below. These have specific legal implications, and we want to be careful with how we talk about these.

But in general, marketing expenses are simply the costs incurred in promoting your business . Traditionally, this meant printing and production of physical collateral, advertising placements in print and on-screen, travel, and employee salaries.

Today you likely have all these same costs, plus ever-growing digital advertising costs. Companies spend extraordinary amounts on Facebook and Google marketing .

There are also influencer marketing campaigns and online subscription payments - both relatively modern innovations.

A list of typical marketing costs

The full “marketing mix” is constantly growing as digital marketing and growth hacking become the norm. We now have a huge variety of different costs that fall under the marketing umbrella.

These include (but are certainly not limited to):

Branding: creating your visual identity, logo design , and tone of voice

Website setup and maintenance costs

PR campaigns & crisis management

Marketing automation tools

Travel expenses

Video conferencing and webinars

Design and development costs

Digital advertising (social and search ads)

Video production

Corporate gifts and samples

Business cards

Sales collateral

Email signature management

Agency and consultancy fees

Attendance at trade shows and events

Promoting and hosting your own events

Search engine optimization and blogger outreach services

Some (but not all) of these will be deductible costs for tax purposes. We’ll go into more detail on this below.

The biggest challenge for marketing managers is to stay on top of all of these different payments . It’s quite natural to miss things - to forget about an ongoing subscription or run over-budget on a big campaign.

But just because it’s natural doesn’t mean that it’s acceptable. A well-run business can’t afford to operate that way.

So how can you monitor and manage all of these costs efficiently? We’ll get to that in a moment, but first we have to talk about tax.

Marketing and tax

This section gives a broad overview of marketing costs and tax principles. You should not rely on this as financial or tax law advice.

British readers can get more information about running a business at gov.uk , while readers in the U.S. should visit irs.gov .

Advertising expenses are important to understand, even if most marketers themselves never have to worry about the accounting implications. Tax deductible expenses let businesses reduce the amount of taxable income they report each year. This means your business pays less tax .

Are marketing expenses tax deductible?

Very generally, if a cost is related to promoting your brand and selling goods, it counts as an “advertising expense” and is deductible. We’ll look at some specific exceptions to this below.

But you need to draw a line between advertising and operating costs . Operating expenses would be incurred whether or not they were part of a marketing campaign, so for accounting purposes you need to keep these separate. They include stationery, insurance, and other basic office supplies.

The other guiding principle is that all tax deductions need to be ordinary and necessary. According to the IRS , “an ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business.”

The good news is that this leaves a pretty broad scope for deductible marketing expenses.

The most common deductible marketing costs include :

Salaries and fees for marketing employees and contractors

Costs associated with public relations

Direct mail and other promotional collateral

Sponsorships

Most of the time, if you can show that a cost was incurred principally for the purpose of promoting your business, it will be a marketing expense.

Now let’s go further and take a quick look at the differences between rules in the United Kingdom and United States.

Marketing expenses in the U.K.

In the United Kingdom, businesses can deduct expenses for:

advertising (newspapers, magazines, radio, TV, cinema)

website costs

bulk mail advertising

free samples

You can even claim subscription payments for tools and industry publications .

What you absolutely can’t claim as a tax deductible expense: entertainment. If you want to take clients out and show them a good time, you’ll have to bear the full cost of that . The same goes for any marketing events you host.

VAT on marketing expenses (U.K)

HMRC explains that "you can usually reclaim the VAT paid on goods and services purchased for use in your business. If a purchase is also for personal or private use, you can only reclaim the business proportion of the VAT."

So VAT fits in with our general rule for taxes above. That is, provided it's directly related to business (and these aren't  entertainment expenses), there's a good chance you can reclaim the VAT.

HMRC gives a few clear exceptions:

Anything that’s only for private use

Goods and services your business uses to make VAT-exempt supplies

Business entertainment costs

Anything you’ve bought from an EU country (you may be able to reclaim VAT  charged under the electronic cross-border refund system)

Goods sold to you under one of the VAT second-hand margin schemes

Business assets that are transferred to you as a going concern

Read more on the HMRC website.

Marketing expenses in the U.S.

The big difference between rules in the U.S. and U.K. revolves around events. If an event is specifically for promotion and advertising, this is a deductible expense in the United States .

“If you have a grand opening event for your local community that includes a meal and entertainment, the IRS considers this advertising, and you can deduct the full cost of the event, including food and entertainment.”

What’s not deductible:

Political donations or advertising that indirectly aids a political campaign

Personal hobbies like attending sports events, even if you go with a client

Donations to some charities . This depends on the classification of the organization, and it may matter if you specify how the money is spent

Losses as a result of promotional discounts

Mileage (as an advertising expense)

It’s easy to get confused about that last one. Because vehicle advertising is deductible . “You can deduct the cost of putting an advertisement for your business on your car (business or personal), but you can't deduct the cost of driving your car around town as an advertising expense .”

How to properly manage marketing expenses

Time for a little strategy. You need to know exactly where your marketing budget is going. And more importantly, you want to be able to put your company cash to its best possible use.

Here’s how to achieve that.

1. Set clear marketing goals

It’s a cliché, but failing to plan is planning to fail. And good planning always begins with identifying your goals and targets.

This is obvious, and we won’t go through the whole process here.

But if you’ve never set goals before, the SMART method is always a good starting point. This means they need to be:

As usual, the HubSpot blog is a great place to start for marketing help. Check out their post on SMART goals (with examples) .

Lake One Digital has great advice: "Look at industry benchmarks. It’s also a good way to see how well you’re performing against peers. The key is to pick goals that are   relevant   to your business at this stage . Are we looking to drive bottom of the funnel metrics like sales and leads?"

Why do you need goals?

Setting objectives is essential, and your marketing plan will suffer without them. But they’re also imperative to help you build a budget .

Once you’ve defined exactly what you want to achieve, you have a better idea of where to deploy company money. If a particular campaign or action will help you get to these targets, it deserves financial support.

If not, you can probably let it go.

2. Choose your marketing strategy

As Nathan Ellering writes for CoSchedule , "a marketing strategy provides the roadmap for you and your team to execute well-planned projects you’ll measure against a clearly defined goal.

This process not only helps you target the right audience with the right content and the right level of effort, but helps you literally understand the impact marketing projects have upon the growth of your organization."

Do you want to put your resources into a thriving website and blog? Will you pump large sums into LinkedIn and Facebook ads, and focus on optimizing conversions? Or will you focus on building a large email list to send tailored email blasts ?

There is a lot of cheap email marketing software available these days, so perhaps you'll set aside a small portion of the budget for that, for example. Among the best-known are MailChimp, Constant Contact, Moosend, and  Sendx.io . Once you select the right one for your needs, you'll need to set aside a small portion of the budget for that, for example.

To properly plan out your budget for the year (coming shortly), you need to know how reliant you’ll be on each action .

We’re going to carry on with the financial gameplan, and assume that you’ve thought about your marketing strategy already. If you need help with the latter, here’s an excellent guide to building a content marketing strategy .

And of course it can be used for a whole range of marketing challenges and techniques.

3. Create (or download) a good marketing budget template

To stay on top of costs, you need to track spending in one place. For this, the simplest option is to have a master marketing budget template that you can update and refer to regularly to make sure you’re on the right track.

This will let you plot out your proposed spending at the beginning of a quarter or year, and line up each likely expense with the goals you’ve already set . And then vitally, you’re able to keep it up to date in real time as your team spends its budget .

For most companies, important expenses will include:

Marketing software (including automation tools and a CRM)

Design and development of digital and physical assets

Travel to events (and the collateral your marketers take with them)

Digital advertising for search and social media

One-off campaigns to generate leads or build awareness

This should have room for consistent, ongoing expenditure - like subscription payments for tools - and unknown (but significant) one-off costs for campaigns and events.

And since you're looking, here’s a great (free) template you can use:

4. Set out your budget

Once you have a good budget template ready, it’s time to fill in the gaps and put actual spending proposals in place.

As the marketing manager, you’re probably not ultimately in charge of the company funds. You’re given a lump sum for your team, and it’s your job to figure out how much money to put where .

The great part about building a clear marketing budget from the beginning is that it shows the executive team that you’re on top of everything. More importantly, once expenses are validated by the CEO or CFO, that’s now your money to spend. And you can remind them from the beginning how important each cost is to hitting your targets.

Some founders and CEOs keep a much tighter grip on the purse strings. They expect you to come to them for every single purchase, and to keep spending as low as possible.

While this might potentially keep overall spending down, it gives less context to each individual purchase. They don’t always know why you’re spending a certain amount in relation to your team’s goals . You just know you need the money for this week’s campaign.

In the long run, this makes marketing money much harder to manage.

The best case scenario is to set out your budget for the full year, broken down into quarters (or even months). If company executives aren’t willing to sign off on this, push for a quarterly budget at least .

And watch out for surprises! According to Allocadia , "it’s easy to forget about subscriptions, retainers and pre-paid vendor agreements (such as conference exhibit fees). These are non-negotiable pieces of this year’s budget, and failing to include them in the plan will create confusion later on."

Make sure everyone knows what you plan to spend in advance , and there are no nasty surprises.

5. Understand how to spend effectively

We’ve written about this plenty of times before, but the way that most businesses pay for things is broken. Most employees don’t have easy access to company money - which is understandable.

But this means that, when it’s time for your marketing team to spend, it’s never going to be as easy as it should be .

Marketing payments usually fall into three main categories:

Online payments for tools and digital ads. These are typically made with a company credit card.

Invoice payments for freelancers, agencies, and consultants.

Travel expenses and other incidentals. In most companies, employees pay upfront and then are reimbursed by the company (eventually). Very occasionally, they’re given access to a company credit card.

What makes this difficult for managers to track is that these methods aren’t connected to one another . Even if the manager or CMO personally handles every credit card payment online, that still leaves employees to file their own expense reports after attending a conference or visiting clients.

The better strategy is to have a centralized spend management system.

We won’t go into deep detail here - we’ve broken down spend management before. The major benefit is that these platforms bring all of your payment methods into one place. This lets finance teams and business team leaders see what employees spend in real time , no matter how the money is spent.

When you’re trying to manage a large budget on the go, this is invaluable.

6. Keep your budget up to date

Whereas building your annual budget can be intimidating, keeping it updated is more tedious. But it’s obviously essential.

The whole point of laying out your budget at the beginning is to give yourself a reference point as the year moves along . So each week (or perhaps month), you need to go back into that budget template and write down what you actually spent.

In some cases, this is a way to keep a lid on things . Spending on certain activities ( hello, Facebook advertising ) can snowball in a hurry. As soon as you start seeing clicks and leads coming in, you want to chase them with as much money as possible.

In other cases, you’ll actually have ammunition to increase spending. As Ana Gotter writes for Singlegrain , "businesses focused on scaling aggressively will likely go all in on PPC campaigns. Their ad spend may be higher, because they’re willing to invest a lot in campaigns that help them reach high-intent users actively searching for products or services like theirs. They also might be paying more to be reviewed on industry blogs or to have sponsored posts from trusted influencers."

One vital thing to remember : The easier it is to actually see all your payments in real time, the more efficient this will be. If you have to chase teammates constantly for expense reports, and check emails for software invoices, this time will quickly add up.

We’ll talk more about visibility in a moment, but this usually comes down to having the right payment methods in place.

7. Make smart decisions based on data

The final step is simply to actually use the information you have . With a close eye on your marketing expenses, you should be able to see which payments are helping, and which aren’t.

As we said above, you’ll also know when you have money to spend. This might free you up to attack bigger projects in the final quarter, or to simply double down on some of the strategies that have worked best to date.

And remember those goals we set in step 1? Now is the time to look at how you’ve spent your budget so far and ask whether each action helped bring you closer to achieving them. If not, you probably need to rethink how you’ve been spending.

The point is, by having your team’s financial information at hand, you’re better equipped to manage marketing costs effectively.

Guiding principles to manage costs

So that was a strategy in seven steps. It’s not overly complicated, but it does require a little desire and discipline on your part.

On top of these steps, here are a few overarching principles to keep in mind as you go.

Oversight is essential

If you can’t easily see what you’re spending, controlling marketing spend will be painful . Which means that marketing leaders need to ensure they have real-time visibility over their team’s payments.

This isn’t so difficult when you have discrete, one-off campaigns. Every payment is top-of-mind and you’re able to keep clear notes of all of them.

But it gets tricky if you’re dealing with a high number of ongoing online payments. You may not remember who authorized them or when they’re due. A big contract renewal to HubSpot, Marketo, or Pardot can be an unwelcome surprise.

Treat the company money like it’s your own

Handling big marketing budgets is exciting. Turning all of those pounds and dollars into paying customers is what it’s all about.

But as soon as things slow down - which is bound to happen eventually - management is going to want to know where the money goes .

According to Forbes , “you should be painfully aware of how much each strategy costs you, both in the short-term and long-term, and have a plan for variances in each strategy."

The point isn’t to pinch every penny. You’ve been given this money to spend it, after all. But you do need to know exactly how much specific campaigns cost along the way, and be ready to argue for their value when the time comes.

Don’t put all your eggs in one basket

You want a nice broad marketing mix, including lots of the spend categories we mentioned above. This doesn’t just give you different ways to find new customers, it also helps you minimize risk .

Allocate budget to a range of different platforms of campaigns , and look closely at the expected return of each. "In addition to the obvious costs of a specific platform—like the estimated PPC cost—you also want to look for “hidden” costs that will affect the ROI of each platform and how much you need to spend on it," advises Disrupted Advertising .

But this is a balancing act. You want to diversify and ensure that you’re trying different strategies without spreading your team too thin.

Be willing to change

Once you’ve found a strategy that works for you, it can be hard to do anything else. The same goes for a good agency or freelancer.

From a strictly cost-cutting perspective, this may not be ideal. It’s wonderful to have a suitable gameplan, but not if it closes you off to better options.

The goal should be to have clear processes in place that let you be flexible when you need to . A basic approach to marketing campaigns that can be easily adapted whenever you need it to be.

This ensures that you can work with new suppliers and modern platforms, without reinventing the wheel every time you launch a new campaign.

Prioritize properly

Yes, you need to be flexible and try new things. You also sometimes need to quit while you’re ahead, and kill projects altogether if they aren’t helping .

But your marketing team should have clear goals in place. And these should always be the starting point. As Opportunity Marketing writes, "please don’t invest in marketing activity just because you feel “we have to” or “that’s what you are supposed to do isn’t it?”  With the growing prevalence of online channels, planning and implementing marketing campaigns on- and off-line can quickly become a minefield!

There are so many fun and exciting ways to market your products these days, and most marketers want to try them all. The most important part of your job may be rejecting promising ideas that just aren’t going to get you to your targets .

Naturally, this will save you time. It’ll also keep costs down by stopping you from heading down tangents that don’t get you anywhere.

Make tracking your whole company's spending easy

Hopefully by now you see the importance of actively managing marketing spend. Doing things on an ad hoc basis just doesn't work for most businesses. You end up dedicating more time to managing the mess than you should ever need to.

And this principal extends to every business unit. Your sales, engineering, and operations leaders aren't finance experts either. Yet they deal with significant budgets and make financial decisions on a regular basis.

As we saw above, the best way to manage this is with a spend management platform. This gives every team - not just marketing - full control over their spending and the ability to make smarter decisions.

If that sounds like what you're missing, we'd love to show you around Spendesk .

And if you forgot to grab that free budget template, here it is again:

More reads on Expense management

The complete guide to company travel & expense management

A quick guide to project budget tracking for happier clients

Employee expense reports: how to fix this broken system

Get started with spendesk.

Close the books 4x faster , collect over 95% of receipts on time , and get 100% visibility over company spending.

Marketing Budget: How Much Should Your Team Spend in 2024? [By Industry]

Published: April 01, 2024

Our most recent State of Marketing Report tells us that marketers are pretty confident when deciding where to invest their budget in 2024.

We’re looking at 57% who feel somewhat confident, and 26% who are very confident their budget plans will maximize ROI for their business.

I want you to feel confident in your spending plans, too, so I created this guide to help you compare how your budget matches up against competitors.

Table of Contents

Why You Need a Marketing Budget

Inside a typical marketing budget, marketing budget as a percentage of revenue, marketing budgets by industry, 7 expert tips for making the most out of your marketing budget.

Today’s marketing landscape is complicated. Budget cuts have become common and underperforming marketers quickly fall under the axe.

And data from our State of Marketing Report supports this — nearly 60% of marketers say the way they spend their budget is being scrutinized either somewhat more or much more now than in the past.

Creating a comprehensive marketing budget is your silver bullet for avoiding these outcomes and having cash to execute your marketing strategy.

Developing a marketing budget also helps you:

• Prioritize projects to invest in.
• Allocate funds for software purchases.
• Compare your year-over-year progress.
• Allocate funds for projects in advance.
• Justify the importance of specific projects.
• Calculate the ROI from your marketing projects.
• Show the value of proposed marketing projects to your higher-ups.
• Show positive ROI, which can help you get a better budget in the future.
• Allocate funds for freelancers and full-time hires who’ll execute your strategy.

8 Free Marketing Budget Templates

Free templates to manage your marketing spend across channels.

• Product marketing budget template
• Paid advertising budget template
• PR budget template

You're all set!

Click this link to access this resource at any time.

According to Deloitte , marketing comprised roughly 13.6% of a company’s total budget in 2023. That’s up 3.9% from the two previous years.

Don't forget to share this post!

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8 templates to help you track and manage your marketing spend this year.

Marketing software that helps you drive revenue, save time and resources, and measure and optimize your investments — all on one easy-to-use platform

Original text

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All you have to do is sign up for a FreshBooks account, add your business details, and you’re ready to go. From the FreshBooks dashboard, you can explore the invoicing features, add billable clients, choose to accept credit card payments with FreshBooks payments, run accounting reports, discover the project management tools, and a whole lot more.

Plus, if you prefer to manage your business on the go with a mobile device, you can download the FreshBooks mobile app – and handle your accounting from anywhere.

FreshBooks works in any web browser on all your devices (desktop computer, laptop, tablet, or phone). There’s also a FreshBooks mobile app for both iPhone and Android, which includes mileage tracking.

Do much more than just bill clients. Small businesses can run their business, create invoices, set up recurring invoices, log expenses, track financial data,  get paid online, track revenue streams, connect bank accounts, and easily create new customers in their account…all on the mobile app.

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Invite up to 10 Accountants per business at no extra cost, on Plus and Premium plans . If your Accountant wants to learn more and familiarize themselves with FreshBooks’ accounting features, they can sign up for the Accounting Partner Program to become a FreshBooks certified partner, which comes with a bunch of cool benefits. If you don’t have an Accountant yet, reach out to us and we can help you get matched with one of our partners based on your geographical location, industry, and your accounting needs.

If you’re not sure about things like accounts receivable, general ledger, balance sheets, or doing your business taxes, not to worry. Getting your accountant on board and working with you in FreshBooks can be done in just a few clicks.

Learn more about working effectively with your accountant on FreshBooks in this great article.

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The power of public relations in the fitness industry

by Alma Curry | May 12, 2024 | Public Relations

Interactions with other fitness brands and famous publications save marketing costs and build a stronger brand identity. Stronger relationships with the media create a significant difference in the fitness industry to show your business authority. Considering famous fitness brands in the UK, for example,  Meridian Fitness spreads awareness among members with press releases. Furthermore, it has transformed the fitness business by incorporating advanced technology for gym management.

How does a PR plan make your brand stand out in the saturated market?

Having a solid public relations strategy changes the game for the owners of fitness businesses. At the same time, good PR requires continuous effort. It does not happen overnight. Communicate business values in publications and use effective storytelling techniques to inspire your target audience. According to Forbes , the Wellness industry was valued at $4.4 trillion in 2020. It shows thousands of fitness business owners who can connect with you. Use the potential of the industry to make your brand stand out in the saturated market. 

Effects of PR efforts on fitness businesses

Releasing press releases on famous publications generates your audience’s interest and retains existing customers for longer. People like to study about fitness activities. The information about events and the presence of personalities in press releases spice up enough to amuse the audience. It helps you to get a do-follow link from another trustworthy brand that enhances your brand’s digital visibility.

Engagement with online communities

Effective PR strategies enable fitness business owners to secure positive media coverage. Featuring fitness magazines and local news segments increases credibility. It allows you to create online communities to build a stronger brand identity. Proclaiming about fitness events, partnering with other local businesses, and announcing sponsorships create a buzz among your audience. Such strategies allow you to navigate various opportunities and win potential customers.

PR efforts show sustainability

Consistent PR efforts demonstrate your dedication, which allows you to win members’ loyalty and trust. Furthermore, announcing new innovations, conducting fitness, and adopting new technology show customer care . Furthermore, it supports long-term business sustainability.

Collecting members’ reviews

Collecting reviews on press releases and testimonials allows you to make improvements. The people who share positive reviews create a positive impact on your business. You can analyze in a better way about members’ expectations from your fitness business. These strategies allow you to make continuous improvements.

PR tips for fitness brands

Achieve maximum outcomes from your PR efforts and follow the right techniques in your blogs and articles. You can host webinars and invite other health and wellness professionals to make positive discoveries. The following tips will help you to make your PR efforts successful:

Know your audience

Choose the publication center in the region where you need to promote your business. Promoting business in New York does not make sense when you run a business in the UK. Know your audience well to effectively market your brand. Research your audience’s interest, this information helps you approach it in the right way. Discuss services of your business that fits their needs.

Be prepared for PR outreach

Go with a plan for PR outreach activities. When you approach popular websites to post something, it is better to check their requirements. Many websites demand new creative styles of story narrations. Some demand precise answers, and some need a few fitness tips. Build your profile stronger so that website owners like to collaborate with you. Furthermore, study the current workings of the websites and see which aspect of your business can be beneficial for them. It is one of the methods of expanding your networks to reap benefits in the present and future as well.

Define your goals

When you are well aware of your business standings and know what you want to achieve, then it becomes easier to define who and how to approach other websites. There are different kinds of purposes of PR outreach, such as brand awareness, conversions or attracting sponsors.

Your purpose defines your PR strategy.

This strategy strengthens your focus and allows you to grab more opportunities. Successful PR campaigns are like having a roadmap towards success.

Time investment

More than money, an effective PR strategy demands time to be successful. Focus on reaching potential members and enhancing engagement with the fitness community. It is an opportunity for fitness business owners to build a strong online presence without disturbing the budget. PR efforts allow you to attract business and develop your business.

Advantages of building a network

It is not like your network will not start providing you with profits overnight. But it will be an incredible source for your professional growth. Connecting with other fitness professionals will help you to know about business trends. You can seek advice from other professionals when you find yourself in trouble. New suggestions will help you with new and creative ideas to manage your business. Get information about the best-performing professionals in the market. You can craft a strategy to get them on your side. Make your team stronger and boost their experience in your marketing campaigns.

Final thoughts

Use advanced tools to find the relevant media contacts. Make stronger PR strategies to facilitate sales and business growth. Mostly members are concerned about the brand reputation of the gym they join. Therefore, never neglect its importance, promote your business on social media, work on guest posts and publish press releases. These efforts are crucial in building stronger public relations.

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Disney Cuts Disney+ Marketing Costs

• Disney+ marketing costs to be reduced
• Six steps detailed to make streaming profitable

Walt Disney Company has announced plans to cut down on marketing expenses for its streaming platform, Disney+. The decision, part of a revised business strategy, was announced by CEO Bob Iger. The company's initial approach to the streaming business was deemed overly aggressive, resulting in excessive spending and a reported $4 billion loss due to heavy investment in streaming.

Iger highlighted the role of audience engagement in reducing churn rates. To enhance this engagement, the company is integrating Disney+ with Hulu. This strategy is anticipated to boost engagement and tackle the issue of password sharing, a concern for the company.

In addition to cutting marketing costs, Iger detailed six steps to make streaming profitable. These steps involve increasing engagement through Disney+, Hulu, and ESPN on its streaming platform. CFO Hugh Johnston also discussed measures to transform streaming into a growth business, primarily by reducing marketing expenditure.