Written a cracker marketing plan and need to put a budget around it?
Developing a proper marketing plan budget is an unavoidable, but at times, excrutiating process.
However, to be able to properly implement a marketing plan, and guarantee the best possible results for your plan and the business bottom line, you need to set a budget. A marketing plan budget outlines the exact dollars and cents that you will need to invest in the marketing plan to ensure its success. The budget will also include the projected sales and revenue your marketing plan activity is anticipated to generate. Your goal, therefore, is to makes sure your sales and revenue data is greater than the projected marketing plan costs – no pressure.
Absolutely, no marketing plan should be considered complete without a detailed budget, yet you would be surprised how many businesses think they can just ‘wing it’, and either focus just on projected sales, fail to allocate sufficient funds to each budget line or quite simply make it up as they go along, dipping into company funds as needed.
Here are some tips to ensure you set the right budget to support your marketing plan:
- Be detailed: Be as detailed as you can around what you expect things to costs, such as consultancy fees, staff costs, charge backs, advertising, PR etc, and if possible break them down to show how the costs and expected projected sales have been calculated.
- Align it: The budget must align with what is in the marketing action plan and your objectives. No exception.
- Do your research: Do thorough research on what your anticipated costs are, either from previous marketing activity or prior market experience – and where possible acquire quotes. If they are good quotes, negotiate a period where the they remain valid to avoid a price hike when you get around to engaging the supplier. Refer to past marketing budgets and identify any potential issues or where proposed and actual costs were misaligned.
- Add a buffer zone: If you are smart you will add some ‘contingency’ to each line item, to allow for any unforeseeable issues such as foreign exchange fluctuations (imperative if you import/export your product), local market economic conditions or a dip in sales. This information should all be available from your background analysis.
- Be flexible: Prioritise costs in your marketing action plan and identify any activity (and therefore costs) that could be dropped should your budget change or sales forecasts are not met. Quite often when a business conducts budget analysis they will identify areas within the business where they can ‘cut costs’ in order to recover funds or recoup losses to deliver a more robust P&L. Know beforehand what you can afford to give back to the business if you need to.
- Be transparent: Don’t be clever and hide poor sales or unexpected savings and costs in irrelevant line item, it will get messy to manage and quite often you will get caught out. This will impact on the trust and relationships you have across the business and cause you to have to ‘explain yourself’ to management or your financial backers.
- Track it: Make the budget a living and breathing document by including an ‘actuals’ line in your budget. This simple addition lets you update the budget as costs are incurred, showing you where you are making savings or experiencing overspend. For your sales forecasts, use real time sales data where available and incorporate the net value for each time period nominated in your budget. This will enable you to report accurately to the business and demonstrate what you are delivering to the bottom line through your plan.
Remember, with any budget the devil is in the detail, so make sure are thorough, and before you submit it or lock it in ask a colleague in finance or your accountant to double check it.
If you’re a business and you need help with your marketing plan you can contact us direct.