The Nigerian Small Business Marketing Guide (Part 5)
Have you been following our marketing guide for small Nigerian businesses?
Catch up on previous steps here.
Step 6. Create a marketing budget.
A marketing budget is critical to executing your marketing plan. Without allocating funds to your marketing activities, it is inevitable that you will either spend too little or spend too much and fail to meet your marketing goals.
There are two ways to create your marketing budget:
a) Use the goals you set in your marketing plan to estimate marketing costs.
Look at the marketing goals (number of new customers to reach, revenue target etc) in your plan as well as the marketing channel(s) you selected and calculate the cost of reaching one new customer. Depending on the channel(s) you selected, your total marketing cost should include the costs of paid advertising (online and offline), technological infrastructure (for example, your business website), marketing materials (flyers, posters etc) and creatives (graphics, photos).
b) Set aside a percentage of your revenue for marketing.
If your business has been in operation for at least a year, use current revenue to estimate revenue for the next year and base your marketing budget on that estimate. Your budget should not exceed 20% of your revenue.
For a new business, base your marketing budget on projected revenue. Your budget should not exceed 12% of your projected revenue.
Like most budgets in business, your marketing budget can be adjusted. Be prepared to make necessary adjustments based on new information or changes in your business.
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