Founding and running a startup is certainly no joke. It requires immense planning across several business domains. Entrepreneurs, especially those dealing with their first venture may lose focus of their marketing goals and strategies because they usually spend majority of their time focusing on other business aspects they consider more urgent such as hiring, product or service development and employee management, amongst others. The sooner they realize that marketing plays just as important a role in their venture’s success as any of the other stated factors, the more beneficial it would prove for them in the long-term.
The First Step in Setting a Marketing Budget
If you want to make a solid marketing plan, you need to start by identifying basic factors like your target market and how to reach out to that market efficiently. If you have little or no marketing experience, you may even hire an experienced marketing professional to help you create a sound plan and then follow it up with a strategy that works.
Related Read: 5 Inexpensive Digital Marketing Tips For New Startups
To make sure that your marketing plan will actually result in positive outcomes, ask yourself if it address these basic five challenges – current competition, future competition, consumers’ bargaining power, suppliers’ bargaining power, and substitute products. If the answer is yes, then your plan will act as a useful guide in the road ahead. If not, it wouldn’t make any difference if you didn’t have a plan.
It may also help to evaluate your marketing plan once it’s been active for about four months. Though your plan may need a year to show significant results, the signs start showing by the end of the first four months.
Setting a Budget
There is no clear and definite answer to how much of your funds must be allocated for the purpose of marketing. To calculate your costs accurately, you will need to first list key parameters such as expected spending on assets, spending on expenses and how much cash you will need to keep the business running the first few months, when the sales will be bare minimum.
Related Read: How Accounting Will Impact The Growth Of Your Startup !
Once you have these numbers figured, you will be able to conclude fairly accurately the funding amount your business requires to take off. Setting your marketing budget to about 10 percent of this amount is generally advisable. However, many examples showcase companies who have done very well with a tighter budget and others failing despite reserving a bigger budget for marketing.
Budget Smartly for Higher ROI
Unlike a few decades ago, it has become easier to reach out to varied target groups in an inexpensive manner using social media and targeted advertising tools such as mobile app advertising. Try striking a balance between these innovative options and other traditional choices like cold calling and doorstep sales for maximum ROI.
Related Read: How Accounting Will Impact The Growth Of Your Startup !
