Car Wash - Fall 2015 - (Page 81)

marketingminute How to Set a Marketing Budget By caron BeesLey whether YoU rUn a small business or a multi-million dollar corporation, marketing is essential to your profitability and growth. Yet many small businesses don't allocate enough money to marketing or, worse, spend it haphazardly. I recently got to know a business that was investing heavily in developing a hip, niche product to add to its already very cool product line. Seemed like a sure winner. However, it quickly became apparent that product development had occurred in a silo, while sales and marketing were off doing their own thing. The result? The week before launch, the business found itself with a fantastic product on its hands, but lacked a go-to-market plan or promotional material for the new product. In a panic, an expensive PR firm, social media strategist and marketing consultant were all pulled in to help drive awareness of the new product. Within a few weeks, the budget had run dry and the business had to quickly revisit its overall operational and sales and marketing strategy, while moving forward on a shoestring. Products and services don't sell themselves. By ignoring marketing until it's too late, many small businesses risk hitting a brick wall and, quite possibly, failing. A hip and trendy product line shouldn't rely solely on ongoing product investment and word of mouth. But how much money should you allocate to marketing? And how can you spend it wisely? Here are some tips that can help you do both: how to calcUlate YoUr marketing bUDget Many businesses allocate a percentage of actual or projected gross revenues - usually between 2-3 percent for run-rate marketing and up to 3-5 percent for startup marketing. But the allocation actually depends on several factors: the industry you're in, the size of your business, and its growth stage. For example, during the early brand building years retail businesses spend much more than other businesses on marketing - up to 20 percent of sales. As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing. This budget should be split between 1) brand development costs (which includes all the channels you use to promote your brand such as your website, blogs, sales collateral, etc.), and 2) the costs of promoting your business (campaigns, advertising, events, etc.). This percentage also assumes you have margins in the range of 10-12 percent (after you've covered your other expenses, including marketing). If your margins are lower than this, then you might consider eating more of the costs of doing business by lowering your overall margins and allocating additional spending fall 2015 | car wash magazine | www.carwash.org 81 http://www.carwash.org

Table of Contents for the Digital Edition of Car Wash - Fall 2015

Letter from the ICA
Meet the Board
By the Numbers
Overheard Online
What do your customers think about your business?
False alarm
Pricing yourself into profit
Don’t hate the haters
Data security essentials
The Car Wash Show 2015 Best Booth Award
Top 10 employee handbook mistakes
IP surveillance cameras
Grit, the underlying problem for car wash owners
Stand out from the crowd
Update from ICA working group
Wash Ideas
Women in Car Wash
WaterSavers
Blast from the Past
Marketing Minute
Ask Champ
Download It!
Focus on a Member
Top Tweets
Safety Tip
Index of Advertisers
5 Things

Car Wash - Fall 2015

https://www.nxtbook.com/naylor/ICWQ/ICWQ0218
https://www.nxtbook.com/naylor/ICWQ/ICWQ0118
https://www.nxtbook.com/naylor/ICWQ/ICWQ0417
https://www.nxtbook.com/naylor/ICWQ/ICWQ0317
https://www.nxtbook.com/naylor/ICWQ/ICWQ0217
https://www.nxtbook.com/naylor/ICWQ/ICWQ0117
https://www.nxtbook.com/naylor/ICWQ/ICWQ0416
https://www.nxtbook.com/naylor/ICWQ/ICWQ0316
https://www.nxtbook.com/naylor/ICWQ/ICWQ0216
https://www.nxtbook.com/naylor/ICWQ/ICWQ0116
https://www.nxtbook.com/naylor/ICWQ/ICWQ0415
https://www.nxtbook.com/naylor/ICWQ/ICWQ0315
https://www.nxtbook.com/naylor/ICWQ/ICWQ0215
https://www.nxtbook.com/naylor/ICWQ/ICWQ0115
https://www.nxtbookmedia.com