Mining Gems From The Business Plan

Now that you have done the business plan, you are clear on your goals, priorities, and target audience, it’s time to talk about money. Successful marketing takes either cash or a “cash equivalent”. A cash equivalent is what you use instead of cash. That could be the time that you barter, but, more often than not, it’s old-fashioned elbow grease. Marketing requires time, and it also requires some money. If you have more time, you can save money. If you have less time, you can get the same work done by hiring help. One way or another, good marketing is going to cost you.

I’ve heard business owners around my area say that they had such a great location or product that they could “do business by accident”. And I’ve driven past their so-called good locations when it went up for sale after they went out of business. Success happens because of hard work, strategy, and, yes, a little optimized luck. It doesn’t happen by accident. Optimized luck is what happens when you’ve done your homework and worked as hard as you can, and when a great opportunity opens up in front of you, and if you have not prepared yourself, you wouldn’t be ready to make the most of the opportunity, or you might not notice it. But you also didn’t just get lucky. You’ve prepared and trained so that you‘d recognize luck when it showed up and so you would be ready to maximize your big break. It’s definitely not doing business by accident.

Keep a look out on your spending. If you are spending more to achieve a goal that brings in smaller revenue than a goal that brings in larger revenue potential, it’s time to reconsider. If you’re not spending anything, hoping to do business by accident, then you’re on thin ice.

Social media is “free” in terms of not costing money to sign up for sites like Facebook and Twitter, but it’s certainly not “free” in terms of the time it takes to put a social media marketing strategy into action. You won’t do business by accident just because you slap together a Facebook page or set up a Twitter account. If you don’t have time, you’ll need the cash to hire someone who can put the time into it for you. And if you have the time to put your social media marketing strategy into action, you’ll still need some cash to bring all the pieces of your marketing plan together, so that your marketing works harder than ever to achieve your goals.

How much is enough then? An industry standard that’s been around for a long time is 5 percent revenue. The idea behind making your marketing budget a percentage of your revenue is that marketing costs are funds you are reinvesting into the company and should be tied to how well the company is doing. In the real world, there are companies that spend far less and far more than the 5 percent and get results that met their definition of success. What matters most is that you spend the budget you do have, wisely.

A zero budget won’t keep you in business long, and it certainly won’t help you grow. If you truly have no cash, you’ll need to roll up your sleeves and put in the effort. If this is the case, how many hours can you put into marketing? You need to write it down and put a dollar estimate on your hourly rate to it. That’s what you are really spending.

If you’re already spending money and you’re comfortable with the level of investment, make sure that you’ve prioritized your budget in line with your prioritized goals. Put the biggest chunk of money where you’ll get the best return or achieve the biggest goal.

Remember that your marketing efforts must be accounted for in your budget either in dollars or in time spent. As you budget your time to complete other projects, be sure to allow for your marketing investment. Setting a budget creates one way to measure effectiveness. Through time, you’ll want to ask yourself whether a particular marketing method is earning its keep. Knowing what you’ve budgeted for it compared to the value of how it contributes to achieving your goal comes in handy when you need to decide what to keep and what to change.

That’s all for now, friends. See you all in my next article.

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