Do you have a marketing budget for your business? Many small business owners don't. But without a plan, or a strategy, your marketing dollars could be wasted on strategies that don't work. But how do you know how much is reasonable?
As a rule of thumb, the Small Business Administration recommends that small businesses with revenues of less than $5 million allocate 7-8 percent of their revenues to marketing. However, if you are start-up trying to quickly build up your sales, you may have to allocate 10-12% or your revenues.
How Much Should You Spend on Inbound Marketing?
Once you determine your total budget for marketing, the next step is to come up with a marketing plan that allocates your budget in a way that maximizes return on nvestment (ROI). Inbound marketing, because of its ability to building brand recognition and create leads, should be no less than 25% of your total marketing budget. So if you have a law firm with $2 million in annual revenue, you should plan on allocating at least $40,000 per year to your inbound marketing efforts. If you are trying to grow your business aggressively, you should double this amount.
What Does that Investment Get You?
Your inbound marketing budget will pay for:
- Initial creation of your content marketing strategy
- Market research and creation of your buyer personas
- Development of lead nurturing and conversion strategies
- Software to manage your inbound marketing campaigns
- Content creation, including writing, editing, and management
- Content distribution through email, social media, or other channels
- Analysis of your results and ROI
Unlike many other marketing strategies, such as print advertising or TV and radio, inbound marketing has the advantage of having measurable results. In addition, the money you invest in creating quality content for your website will generate traffic, leads and clients for your firm in the years to come. This is in contrast to money spent on traditional advertising, which stops working for you the minute you stop paying for it.
How much of your budget you decide to allocate to inbound marketing ultimately depends on your unique situation, your growth goals, and your cash flow. If you need help figuring out if inbound marketing is right for your company, and how big of an investment it will take to achieve your business goals, request an inbound marketing assessment.