Marketing funds your business by bringing in new customers and keeping customers loyal, but what funds your marketing?
Marketing does not come cheap. You must pay writers and designers to create content, social media gurus to manage your social media accounts, and several other marketing professionals to organize campaigns and keep your brand fresh. That’s not even mentioning the marketing software you should buy and the devices on which to run them.
Therefore, to have successful marketing, you need a strong funding strategy. Fortunately, we made one for you:
Step 1: Assess Your Marketing Needs
Not every business has the same marketing needs. To keep you from under- or overfunding your marketing strategy, you should assess your needs and build a rudimentary marketing plan first.
There are several ways to go about determining your marketing needs, but here is a step-by-step guide that will work for most businesses:
- Research your competitors’ marketing strategies.
- Research your target audience, including their age, gender, income level, and media preference.
- Understand your brand, including assets like your business name, logo, motto, and digital image.
- Evaluate previous marketing campaigns, understanding the effectiveness and identifying waste.
- Consider practical marketing strategies.
Once you have a better picture of the marketing campaigns your business may benefit from, you can more accurately determine how much extra funding you will need.
Step 2: Evaluate Your Cash Flow
Ideally, you will be able to fund your marketing endeavors using your existing profits. However, before you start promising money to your marketing department, you should make sure you have that money to give. To do so, you must turn to your cash flow.
Your cash flow is the amount of money coming into and going out of your business. A balanced cash flow ensures you have enough to pay your employees, buy equipment and supplies, maintain an inventory, and have some extra left over for emergencies and new products. If you aren’t certain about the state of your cash flow, you should create a statement of cash flow using this simple method.
Step 3: Improve Your Cash Flow
Likely, you determined your cash flow isn’t as healthy as it should be ― especially if you are hoping to inject money into a new marketing campaign. Fortunately, there are dozens of business strategies that help you boost your cash flow without adding significant risk. Here are a few of the most popular and promising methods:
- Receive your cash sooner. If you can, shorten your payment periods, so less of your money is tied up in your receivables. You might also try invoice factoring, which allows you to sell your unpaid invoices to a factoring company to get paid sooner.
- Use a credit card. Business credit cards often have exceedingly useful terms, including long grace periods and valuable rewards, so you can make payments on credit with few worries.
- Obtain a line of credit. Like a mix between a loan and a credit card, lines of credit are provided by lenders for specific business purposes, like construction or working capital. Typically, the lines are revolving, and you only pay interest on the amount you use.
Step 4: Budget Your Campaign
Once you have enough cash on hand, you can begin precisely allocating funds to different marketing endeavors. Your budget should have exact numbers for every cost, including your marketing employees, subscription marketing software, marketing consultant fees, advertisement placement fees, and more. The objective of budgeting is to avoid encountering unexpected costs that might upset your cash flow and potentially adversely affect your business. So the more accurate you can be, the better.
What’s more, you must avoid deviating from your budget once your marketing campaign is underway. Though it might be tempting to upgrade here and spend slightly more there, a flawless marketing campaign is not worth staggering the rest of your business. Marketing is meant to enhance your business prospects, so you should stick to your budget as closely as possible.
Step 5: Know What You’re Paying For
In marketing, as in other aspects of business, you often get what you pay for. The bigger your budget, the more outstanding your marketing will be. However, your business might not need a multi-million-dollar marketing campaign. If you run a local business, for example, it’s important to find a budget that works for you. Whenever you contract marketing professionals to build a marketing campaign, you should know exactly what they are doing, so you know how the investment will help your business.