According to a recent survey, the answer is no. Up to 42% of companies surveyed stated they were budgeting less than 5% of revenue for their annual marketing strategies. And less than 30% were spending an adequate amount on marketing for their growth potential.
That’s not a good sign for photography businesses that intend to grow to a successful size. In fact, without a sufficient budget, your business will never make your marks, and will eventually fade from existence.
With that in mind, its time to take charge of your marketing strategy, and structure it for success in the coming year. Once you have goals and strategies in place, you’ll be much better prepared to budget a realistic figure.
Take a look at these three approaches to producing a usable marketing plan that fits within your budgetary means.
1. Start with the end in mind. What dollar amount do you wish to make in the coming year? Once you have a realistic number in mind, use that to determine your marketing commitment level.
The average growing company typically will spend around 10 percent of their total revenue on marketing, with very aggressive companies moving towards the 15-20 percent level. Calculating your marketing costs is a simple matter of taking your desired revenue level multiplied by the marketing percentage you wish to apply. For example, if you expect to make $100,000 in the coming year, and you wish to take an aggressive approach to marketing, you may choose to spend 15 percent, or $15,000, of your budget on marketing costs.
2. Create your campaign calendar for the year, and realistically budget for each campaign. This approach can benefit you in a number of ways. Unlike the first approach, it provides you with an exact list of campaigns you will be offering in your studio, and put together a yearlong plan that will be easy to follow.
To get started, create your yearlong calendar of campaigns. Look at the specific activities you are planning to launch, and calculate the expected income and costs associated with each activity. Determine what type of marketing you will do with each campaign, and estimate appropriately.
3. Use this year’s numbers, and project the growth expected for the coming year.
Depending on how successful your studio was this year, you may wish to use this year’s numbers to project next years budget. This works well if you already have a high level of success, and you anticipate doing about the same level of business in the coming year. Let’s say your total revenue for this year is $100,000, and you project a 20 percent growth rate for the coming year. Your projected revenue for the coming year is expected to be at $120,000. For a 10 to 15 percent marketing budget, you can expect to spend anywhere from $12,000 to $18,000 in the coming year on marketing.
The key to each of these strategies is to give you an idea of the total marketing expenses you can expect to pay to achieve the level of success you are planning for. It can also provide you with guidelines when making decisions as to they types of marketing you’re looking for. You may be able to easily rule out more expensive forms of marketing right away just by knowing your yearly budget marks ahead of time.
As a creative business owner, you may dread the budgetary process. But with a solid plan in place, your business will run much more effectively in the coming year. You and your business will thank you for it.