Marketing is the process of creating, communicating and delivering marketing messages to target customers. Marketing can be as simple as sending a Thank You note to your customers, or it can involve purchasing media advertising to reach potential customers. Regardless of how complex or simple your marketing plan, however, it’s always essential to know how much money you should spend on marketing for your small business
A small business doesn’t have the budget for marketing like a large corporation. And, that is okay! Small businesses don’t need to spend money on marketing to succeed. A lot of it depends on your niche and what you offer. However, there are some marketing costs you should keep in mind as you plan your strategy and marketing budget.
Whether you own a small business or operate one independently, it can be difficult to make ends meet and compete with the big businesses’ marketing strategy. That is why operating your business with limited resources requires a lot of creativity and resourcefulness.
In this article we’ll look at the average cost of marketing expenses for small businesses, looking in detail at marketing channels and tactics, whilst also offering some great tips to help manage your small business finances while operating at a low cost:
How much should you spend on marketing?
In order to answer this question, we need to understand what constitutes good marketing for businesses. In order to get a better idea of the cost required for marketing your business, you need to understand the most essential factor :
Not all businesses are the same, different marketing techniques work differently for each individual business, the target audience of one business will not be the same as the next, and in almost every case the marketing spend will be determined by the level of competition in your business area.
Understanding that no two business models are the exact same is key before developing your marketing efforts, But what else is important to know before developing digital marketing strategies?
- Visibility – Marketers can only hope to reach “unseen” customers if they don’t know who they are. Knowing your target market will help you determine the right marketing strategy so you can use your resources effectively.
- Attractiveness – What customers are looking for in a product or service, and even your website design. If you don’t have the qualities customers are looking for, they won’t buy from you.
- Demographics – This is the information about your customers, such as age, income, education and more. Knowing this information can help you develop marketing material that’s more relevant to your customers.
How to calculate your marketing budget
There are multiple ways to calculate your marketing budget, depending on the information you have at hand. To calculate your marketing budget, start with an estimate of how much money you want to spend on marketing, and what specifically your marketing goals include. Once you have this amount in mind, you can begin calculating how much you need for each marketing expense.
Depending on your marketing budget, you can break these expenses down into the following categories:
- Advertising – This includes TV, radio, print advertisements and more traditional style of advertisements
- Online marketing or Digital Marketing – This includes your digital strategies such as Search Engine Optimisation (SEO), Email marketing, social media marketing, website design etc.
- Other expenses – This includes any other expenses specifically related to marketing, including conference attendance or consulting costs, it’s important to budget not only for your on-going campaigns but the cost in time, and preparation.
Which marketing tools are available to small businesses?
Online marketing is arguably the most important aspect of running a successful small business. Without an online presence, many customers simply don’t know about your business. And, without customers, your business does not exist.
To reach potential customers, you will likely need to develop an effective online marketing strategy. Unlike the larger businesses and chains, you won’t need to develop a fully fledged marketing campaign with a six figure advertising budget. But one or two digital marketing techniques may help increase your sales revenue. Let’s take a look at what they are and the cost of each.
As a small business, getting a website may be the first step into the digital world you take, having an online presence with something as professional as a website gives your customers more trust in your reliability and professionalism, and also gives you the opportunity to reach a whole new demographic of potential customers you may not have even known existed.
Depending on how involved you want or are able to be the cost of web design can vary. For example, you are able to build your own website using popular web-building software’s such as Squarespace, Wix & GoDaddy, or if you’re not as tech-savvy you can seek the help of professional web designers, who will be able to design a bespoke website for your business.
Cost of a DIY Website : from £10 -£30 per month, depending on which web building software you choose to use. However, additional plug-ins and features will likely cost more.
Cost of a website built by a marketing agency: Prices will vary from agency to agency, however a standard 1 -3 page website on average costs £200- £300, whereas a larger 5+ website averages arond £750 and an online Ecommerce store £1250+. However, many marketing agencies recognise that costs for marketing are difficult for smaller businesses, and will often offer bespoke packages or monthly payment schemes to help with the cost, these are often called ‘pay monthly websites‘.
Great, you’re online! Now how do we find you? SEO or Search Engine Optimisation is the process of making your business more visible online. Marketing experts will argue that without SEO a website is pointless, as nobody will find it.
SEO can be integrated in most small businesses marketing plan and can be expected to help increase monthly & annual sales after roughly 3 months of work.
The cost of an on-going SEO campaign is more often than not dependent on the business type, the competition and the location. Small businesses often require a smaller SEO package, due to lack of local competition.
SEO cost for small businesses: You can expect to pay anywhere between £150 – £300 Per Month for SEO as a small business. Whilst this sounds like a large monthly bill, it will however focus your entire marketing strategy at achieving and ranking at the top of Googles Search & Map to generate more calls, leads & sales.
SEO is a long-term marketing strategy which incorporates content marketing, website optimisation, off-page optimisation and many more day-to-day marketing activities which help prioritise your websites best performance online.
Social Media Marketing
As a small business, you may or not have already created social media profiles in the hopes of attracting new customers.
Social Media platforms are marvellous for reaching an array of local people and attracting them to your brick & mortar store, or getting them to shop online. However, in order for a social media campaign to be fully effective, it needs time & scheduling alongside regular competitor research.
Social media advertising can vary on price, depending on whether or not you’re looking to increase following, develop a brand, encourage engagement or simply build your profiles.
Cost of Social Media:
The great thing about social media advertising is you can do it yourself and it’s completely free! Setting up your social media business profiles comes at no cost, the only thing you’ll need to invest is your time.
If you’re proactive and like to schedule promotions, offers & deals then Facebook Meta Suite has the ability to schedule posts, videos, deals & much more to both Facebook and Instagram. You can target which specific demographics you want to reach, what time of day you’d like to post them and how often you’d like to re-share them.
However, if you’re looking for more of a managed social media presence you may be looking at between £100-£500 per month depending on your goals, level of competition and intensity of the campaign.
Social media campaigns can also be dove tailed with social media ads such as Facebook ads, Instagram Ads and even Tik Tok Ads, however this would likely come with additional daily ad-spend cost
Possibly the cheapest marketing campaign your small business, and the easiest way of reaching a mass amount of customer segments. Email marketing is technically free if you don’t count the time that email campaigns take to create, or the email marketing platforms you may have to purchase (However, these are generally a one off fee which gives you a lifetime of email scheduling and email tracking for your business).
Email marketing campaigns focus on using your existing customer base and gather new customer emails in order to alert your buyers that you have a discount/ offer or new product out. You can schedule your mail to send reminders & offer exclusive deals to a specific demographic.
Generally small businesses tend to avoid adopting an email marketing plan, this is purely due to not collecting customer data to use after sales.
If you’re looking to try your hands at email marketing campaigns, you’ll want to adopt a automated mail provider which distributes your email to your client list Mailchimp is a well-known provider which offer this for a variety of different monthly packages – including a free package option.
If you’re unsure on how to get success with email marketing you may look for an email marketing service provider, this could be your typically marketing agency or specialist who can help with collecting your customer contact info & producing quality advertisement copy to reach out to your clients with.
For a small business looking for help with an email marketing plan you may be expected to pay between £100-£200 per campaign depending on level of intensity and reach.
Marketing can be a seasick boat, but you should never sail without a compass. In order to steer your boat safely, you need a map. And, without that, you will never reach land. The same is true of marketing. Without a marketing plan, you are flying blind. You can’t hope to compete with large brands without a marketing strategy, and you will sink without one.
Your business may be small, but that doesn’t mean you don’t deserve quality marketing services from a specialist agency. A lot of local businesses try their hand at marketing without realizing the cost involved until they are faced with it.
Now that you have an idea of how much you should be investing in your marketing, the question is where to start. If you’re looking for a reliable marketing agency, you’ve come to the right place.