How to Set a Marketing Budget
I’m a big fan of effective budgeting. I don’t mean the old “use last year’s numbers and stick it in a drawer until next year” type of budgeting, but real world, data based, flexible budgeting, the kind your entire profit plan is built around, the kind that, when done right and used effectively, would at least double and often triple the profit levels of most small businesses. However, I find that many times people get tripped up on their marketing costs.
On one hand, marketing is an expense that needs to be controlled, just like all of your other expenses. On the other hand, marketing is an investment, and the more you spend, the more you make. Should your marketing costs be firmly budgeted, or should they be maximized for the greatest amount of sales in the shortest period of time?