Content Creation, social media marketing, and other initiatives can help you reach and engage your target audience—but only if you have the funds for them.

To outline how much money your business can allocate to various marketing materials over a specific period, you’ll need to build a detailed marketing budget. Here are the essential steps for getting started.

Define your goals

To begin, establish clear objectives for both the short term and long term. If your immediate target is to attract and convert more leads at a quicker pace, you’ll need to determine concrete metrics to aim for—perhaps you want to bring one hundred leads a week to your sales funnel and convert 5 percent of them into paying customers within six months to twelve months. Similarly, an overarching goal of extending your reach and building your brand may be too vague, so you should create parameters for how to achieve them and measure your success. By understanding the required funds and timelines for these goals, you’ll be more equipped to craft a well-managed budget.

Establish your target audience

Besides your goals, you’ll need to identify your core customer base and what motivates them to buy. To gain a comprehensive understanding of who your customers are, consider using a tool like Google Analytics to gather information about their age, gender, income, and geographical location (if your business caters to a specific area). Also, engaging directly with them on social media platforms via comment replies and polls can provide you with valuable insights into their lifestyles and buying behaviors.

Identify ideal channels

Given the multitude of available avenues for marketing, you’ll need to conduct some research to ensure that the ones you choose are aligned with your target demographic. For instance, Gen Zers are more likely to be active on social media platforms such as Instagram and TikTok, while baby boomers and Gen Xers may be more responsive to Facebook or email marketing campaigns. The decisions you make about how and where to tailor your marketing messages will directly impact your marketing budget.

Research your competition

Conducting a competitive market analysis provides valuable insights into who your competition is and what type of marketing they are doing. This information can enable you to optimize your own marketing efforts by revealing missed selling points or market trends in your messaging or call-to-action efforts that need improvement.

Calculate your revenue

With all the necessary information gathered, it’s time to turn to your finances. To create your marketing budget, you need to assess your current or projected revenue and where it goes to gauge how much money you have to work with. The amount you apportion to your marketing will depend on various factors, including your overarching goals and target market. However, your business’s size and age will also impact this number. For example, the US Small Business Administration recommends dedicating 7 to 8 percent of your gross revenue to marketing if you’re below $5 million in sales and have a net profit margin between 10 to 12 percent, while other experts suggest spending up to 20 percent if your industry is more competitive.

Allocate resources

In addition to your general marketing funds, you’ll need to determine how much you can designate for each individual activity, which can be challenging. If your efforts are too narrow, you may risk missing potential clients; conversely, casting your net too wide can lead to messaging that will not resonate, ultimately affecting your customerconversion rate. Review your goals to assess your priorities so you can find a balance through the various marketing channels and appeal to as many potential customers as possible.

Create a marketing budget template

To better stay on top of where you’re putting your resources, build a template that ranks all your marketing expenditures by category. This will add structure and can also help squelch the chances of overspending and exceeding your monthly, quarterly, and yearly budgets. Also, set KPIs to measure the results of your marketing initiatives and return on investment. The impact of these efforts will allow you to adjust your budget and strategies as needed.

Successful marketing is the catalyst for enticing new customers and fostering loyalty from existing ones. Developing a budget will help ensure you have the financial resources, no matter how limited, to maximize this business tool and reach even greater heights.

TAKE ACTION:
Set clear marketing goals and allocate your money accordingly to get the most out of your marketing investments.