When deciding how much should a small business budget for marketing, the U.S. Small Business Administration advises on allocating 7-8 percent of revenue to marketing and splitting it between developing your brand (website, logo, etc.) and promoting your business (ads).
It is recommended that you have margins that range from 10-12 percent that cover your expenses, including marketing.
Determining how much should a small business budget for marketing should take into consideration one important factor. In our experience, it depends on your business goals. What do you want for your business?
Understanding where your business is and where do you want to take it is fundamental in understanding how much to allocate in marketing.
That is why at Zaperoco Media, all our plans and services are tailored to your needs because we understand that each business has different requirements. Taking the time to study your business goals or consulting a marketing expert is the best place to start.
How Much it Costs to Develop Your Brand?
Let’s start on developing your brand as recommended by the SBA. Small businesses should begin by developing their brand because a strong brand image resonates with consumers and helps your business stand from the rest of competitors. There are always places like Upwork or Fiverr to find cheap graphic designers to help you develop this for low-cost alternatives. Agencies prices may vary from $4,000 to $10,000 and more.
At Zaperoco Media, we pride on offering you affordable prices to help build your brand. Either specific requirements through our One-Stop-Shop Graphic services or a full brand identity package.
The next most important thing is your website. If your business lacks a website, it is important to set one from the start that helps present your value proposition effectively and reach more customers. HubSpot identified 16 of the Best Free Website Builder to Check Out in 2020. A good website can be anywhere between $3,500 and $10,000.
At Zaperoco, we understand the importance of a good website. Our web development packages are affordable and tailored to your needs. For more information, contact us!
How Much it Costs to Promote Your Brand?
When considering how much should a small business budget for marketing, Laurel Mitz, founder and CEO of Elevate, my brand suggests 12 to 20 percent of your gross revenue should be spent on promoting your brand.
You might want to start considering promotional tactics like social media marketing, advertising, creating content, local marketing, guerilla marketing, and events.
There are always inexpensive alternatives to do these. In fact, you can do all these tactics by yourself! Although some of these may not incur any costs, they do take a considerable amount of time to produce successfully.
Free Promotional Tactics
Some of these free tactics are Content Marketing (writing a blog, podcast, videos), Local Marketing (Visiting Events, Networking, Google Business), and Social Media. When done properly, these can be a marketing tactic that drives a substantial amount of visitors and brand awareness to your business. On the downside, it’s very time-consuming to do properly.
If you decide not to do it yourself for all of these alternatives, you’ll find agencies ranging from all prices. At Zaperoco Media, our social media packages start as little as a 2-night stay at a Hilton. We offer great social media packages designed for all business sizes, both affordable and tailored to your needs. If you decide to do it by yourself, you’ll end up finding it takes a lot of time to do.
Another “Free” tactic is Content Marketing. Great videos go a long way and all you are a good camera. In today’s times, you can probably create great videos with just your smartphone. Here is a tutorial on how to shoot amazing videos with your iPhone. For blogs using WordPress, Medium, or even LinkedIn can be a great place to start. You will always want to have a website with a blog where you can post these to drive more organic traffic. Remember – always SEO optimizes your blogs.
Lastly, local marketing can be a great tactic to drive leads with low to non-expenditure. This consists of placing your business on Google Business and promoting your business on local blogs, yellow pages, and more. Attending networking events and talking with neighbors to set affiliate marketing strategies.
Paid Promotional Tactics
Now that we've addressed all "Free" promotion tactics, you might want to begin thinking about how much to put on promoting your business. Remember, the SBA advises on splitting your marketing budget in between developing your brand and promotional tactics.
Great paid promotional tactics are Facebook Ads, Google Ads, Guerilla Marketing, and Events.
When talking about social media ad spending, it depends on your goals. According to WordStream, the average Cost Per Click (this means how much it takes for someone to click on your ad) is $1.75.
Each of these tactics depends on your marketing goals and how much is your budget for marketing. There are always cost-efficient solutions for all of these tactics. Trying them all and seeing which is the best for your business is part of the process.
Remember, marketing is like that old saying that “in order to do a good omelet, you have to crack some eggs”. There’s never one fit-all solution, and trying different things is always the best strategy.
In conclusion, when thinking about how much should a small business budget for marketing, begin by working on the math. Try to include your marketing expenditure on your margins. Then begin by investing in developing your brand. Secondly, move to free or cost-efficient alternatives to promote your business. Lastly, invest in promoting your business by trying different strategies and looking at which offers the best investment return.