In this world of the internet and social media representative price for having someone do social media marketing for you can run anywhere from $1,000 to $20,000. Is this a realistic figure for your business? How much should your marketing cost you in 2019? And, if you outsource all of your marketing you will get a bill each month for the entire cost. But, if you do the job “in house” how do you track expenses in cash out of pocket as well as your time and employee time spent on the job?
Let’s assume that for every bit of marketing that you do that you will gain some business. But, with marketing, as with many things in business and life, there is a law of diminishing returns. Most folks will look at their budget and see how much marketing effort they can afford while others will make an educated guess as to how much marketing they need to do and start there. In either case, it is really important to keep track of how well your efforts are working out and how much it is costing you. Here at Exigo Business Solutions in the Kansas City area, we encourage our clients to budget for expenses like marketing with a very effective accounting method called Profit First. We also strongly recommend using the best bookkeeping software for small and medium-sized businesses, QuickBooks or QuickBooks Online. One of the great aspects of this software is the ability to generate QuickBooks custom reports for things like your marketing efforts, how much you spending, and how well it is working out in new customers, more sales, and healthier profits!
How much marketing you need is enough to keep customers coming to the door, increase sales, and drive profits. And, using a good bookkeeping tool like QuickBooks you need to find the point at which more and more marketing is costing more and more money but not improving your bottom line!
The quick answer is that there is not and should not be. However, the Small Business Administration suggests the new companies should expect to spend between twelve and twenty percent of gross revenue on marketing while established companies should expect to spend between six and twelve percent of gross revenue.
Those who believe that all of this expenditure is necessary may quote Henry Ford who likened saving money by not advertising to trying to save time by stopping the clock!
On the other hand, businesses vary in what ways they can most effectively advertise and in whether they need to pay someone else or do much of the work in house and for less.
There are certain small business marketing essentials, many of which are not very expensive, and then there are the expensive bells and whistles.
Pay attention to what your customers are saying, both when they are happy with your products and services and when they complain. Use your QuickBooks software to keep track of your customers as well as your marketing list. Then you will not need to pay an advertising company to do the work that you can do yourself because you already have the information.
Take some time to learn about SEO or search engine optimization. It can be the key to success in this era of internet marketing with email campaigns and optimized websites. You do not need to know the mechanics of much of this but you can better direct the efforts of others if you understand the principles.
There are two ways to apply this last advice. If you are using internet marketing and buying ads on the Google search engine. Pay only for “pay per action” ads. These are ads where you only get billed if the person buys something or contacts you for more information and not simply if they randomly click on one of your ads.
The other, and most important, part is to track your results. What were your sales when you started out and what are they now? Is your list of customers growing? Are sales per customer increasing as well? How well do these numbers stack up against your costs?
For help setting up your bookkeeping to effectively track these numbers, contact us at Exigo Business Solutions in the Kansas City area.