By now you should have established what you want to accomplish for your business in the upcoming year. Next, you need to figure out what budget you need to set aside to hit those marks. If you are a franchisee, those numbers may have been pre-determined for you in your franchise agreements.
However, if you don’t have any formal commitments, or you just want to make sure your spending is adequate, there area few things you can do. Typically we see our clients earmark 5-7% of their total revenue for their marketing strategies. It’s really important to note this is not based on your total revenue in 2016, but what your GOAL revenue is for 2017. You can also determine your percentage by researching the trade publications in your particular industry, or you can refer to this great article by Entrepreneur: https://www.entrepreneur.com/article/54436
There are some external factors that can influence your budgeting as well. For example, we just wrapped up a big election year, which typically puts a lot of pressure on the traditional TV market. If you think that TV may play a big role in your strategy, you may plan on the lower end of your percentage since that additional pressure on the market won’t be there any more. If you know there is a new competitor coming into the market, you may need to plan high to offset the spending they may be launching with.
Before you start allocating these dollars to specific outlets, you may want to consider slicing off 5-10% of your overall budget as a “slush” fund. This will allow you to have a little money set aside for opportunities that come along which are too good to pass up.
Now that you have your magic number, it’s time to figure out what tactics will be the most impactful and efficient in 2017.
