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Setting a Marketing Budget

Marketing without money is like tailoring clothes without a fabric. However, determining a marketing budget is often more challenging than having the knowledge that you just do not have the money at all. So, how much should you devote to your business' marketing effort?

This is a tricky question, and unfortunately, there is no formula for solving it. But anyhow, there are some methods you can use to set a marketing budget.

One effective method of setting a budget is to allocate a fixed percentage of your forecast sales on a calendar basis. To determine your forecast sales, get the trade figures and ask your business accountant and counsellor for advice. Also check your previous sales and promotional expenditures to get an estimate. While doing so, remember that your marketing budget has to reflect your business and not the other's.

In addition, keep in mind that a good marketing budget has two parts. First is a fixed monthly allocation for ongoing marketing expenses. This will cover the monthly expenses you pay for your marketing managers, materials, services, etc. Second, is a contingency budget or project budget. This will help you cover the cost for unexpected needs, like bolstering your marketing effort to in event when new competitor appears or market competition becomes challenging.

To set up these budgets, you need to use all the resources available to you. Your financial advisors and accountants can help you determine the cost of your goals more efficiently than you can. So seek their help in order to create the most effective marketing budget plan.