How Much Does Marketing Cost For Small Businesses?
How Much Does Marketing Cost For Small Businesses?
As a small business owner, you likely wear multiple hats and constantly seek new ways to streamline your operations. One critical area of consideration is your marketing plan and budget. Whether you’re just getting started or looking to scale your operations to align with your business’s growth, understanding the landscape of marketing costs is essential to make informed decisions that help your business progress even further.
Here, we will explore some of the marketing costs small businesses should prepare to invest in. While there’s no one-size-fits-all answer for every business, understanding ballpark figures and influencing factors can help you devise a strategy and make difficult decisions about where to invest your hard-earned money. Read on to learn more.
How To Determine Your Small Business Marketing Budget?
Determining how much money you should put toward your business’s advertising budget is a multifaceted process that depends on your company’s revenue, size, growth plans, target customer base, and marketing channels, among others. While there is no agreed-upon average advertising budget for small businesses, many businesses typically allocate 2% to 5% of their revenue to their marketing budget. For B2C businesses, this figure increases from 5% to 10%.
Your marketing budget should cover direct marketing expenses, including social media, PPC, software, monitoring tools, and other related costs. When coming up with a marketing budget of your own, be sure to keep the following in mind:
Calculating a Marketing Budget
Setting a marketing budget for your small business is often a complicated process that involves several key components. First off, you will need to have a solid marketing strategy in place before determining your budget. A good marketing strategy will serve as your roadmap for spending, ensuring that you will likely see a return on your investments. Your business’s advertising strategy should outline in-depth goals beyond increasing sales and revenue, such as driving website traffic or boosting social media engagement.
Understanding your target audience and being able to meet them where they are is another crucial step to take before calculating your marketing budget. To pinpoint your most likely customers and determine what they need, you must conduct market research, collect demographic information, and uncover which platforms potential customers are finding your business through.
Finally, your distribution method, or the channel you use to market your brand, largely depends on this target audience. While traditional marketing channels are still critical in some industries, digital marketing has become a cost-effective way for small businesses to reach their audience.
Once you’ve detailed all your business goals, determined your target audience, and identified the best way to reach them, you can use this information to allocate your funds accordingly, ensuring you get the most out of your marketing budget without spending unnecessarily.
Where To Allocate Your Small Business Budget
After establishing your marketing budget, the next step is determining how to distribute those funds across various marketing channels. The main categories to consider are online and offline marketing, and within these, paid and organic strategies.
Online marketing encompasses digital strategies like SEO, content marketing, social media marketing, and pay-per-click (PPC) ads. If you understand your target audience’s behavior, then it should be fairly straightforward to distribute your budget accordingly.
Ask yourself, where do my customers spend the most time online, and how do they search for products or services like mine?
On the other hand, offline marketing includes traditional methods such as TV, radio, print, and event sponsorship. While these methods can be more expensive, they may be ideal for businesses whose customers are not as active online.
Paid marketing refers to any strategy where you pay to place your content in front of your audience, like PPC or social media ads, while organic marketing involves attracting your audience naturally over time through SEO, content creation, and social media engagement.
Ultimately, where to allocate your budget depends on your specific business goals, target audience, and the channels that yield the highest return on investment. It’s a dynamic and ongoing process, and as you gain more insights about your audience and your marketing performance, you should continually reassess and adjust your budget allocation accordingly.
How to Scale Up Your Marketing Efforts
As you grow your small business, it’s vital to take steps to scale up your marketing efforts as you go along. Staying aware of new opportunities and trends in your market and industry is an essential and ongoing step of the process. These insights can help guide your strategy and help you connect with potential customers in a meaningful way.
Leverage market research tools, industry reports, competitor analyses, and social listening platforms to help you identify these new opportunities to help your customers solve challenges. Always be aware of changes in consumer behavior, emerging platforms, and evolving industry norms. Staying ahead of these trends will help you proactively enhance your marketing strategy and capture new market segments while maintaining a competitive edge in your industry.
Marketing Channel Investment
Investing in additional sophisticated marketing channels and strategies will benefit your overall advertising strategy as you scale your business. Advanced marketing techniques include video marketing, influencer marketing, and podcasting – all of which can help your business stand out from the competition and increase your market share.
Video marketing, for instance, is an engaging medium that captures the attention of your audience and conveys complex messages in an easy-to-understand format, while podcasting is an intimate channel that helps your brand form strong connections with your audience and positions you as an industry thought leader.
These channels can be more resource-intensive than traditional methods, but the potential return on investment makes them valuable to a diversified marketing strategy. It’s crucial to continually evaluate each channel’s effectiveness to ensure it resonates with your target audience and contributes to your business objectives.
How Revenue-Based Financing Can Help Your Small Business Marketing
Securing the necessary funds to scale your marketing efforts can be challenging for growing businesses. That’s where Mantis Funding comes in. With our revenue-based financing options, we provide innovative solutions that help rising companies compete with industry leaders.
With this type of financing, you sell a percentage of your future sales in exchange for working capital that you can invest directly into your marketing budget; the payment term is between 3 and 6 months, with renewal options available at 65% completion.
Mantis Funding’s Revenue-Based Financing can help ease the financial burden of investing in advanced marketing channels, helping you amplify your reach, engage more customers, and ultimately, grow your business. Apply today and let us become a strategic partner in your business’s success story.
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