Setting a marketing budget and a sales goal

how to create marketing budget
Before you begin the process of developing a marketing plan, you need to set a marketing budget and a sales goal for your business. 

Think of your sales goal as a total score of points on a dartboard.
Your marketing budget dictates the quantity and quality of darts you can throw to win the game—and yes, there are thousands of different kinds of darts! 

You won't always hit the bullseye (and you might hit the wall), but you'll learn something valuable with every throw so you can improve your skill and your score over time.

A sales goal needs to be realistic, but not too easy. If you're a consultant or a designer, how many clients can you juggle at once and still keep everyone happy? If you're a maker or retailer, how many items do you need to sell to cover your costs and make a little profit?

Create a goal for whatever period(s) make sense for you and your business...daily, weekly, monthly, quarterly, annually. It's so important to stay committed to your sales do you play darts without a target? 

A marketing budget is about both your time and your money. You need to estimate up front how many hours and how much money (per week or month) you are willing and able to spend. If you have more time than money, you probably need to handle marketing efforts yourself. If you have more money than time, you can hire a marketing consultant to help out here and there. 

Finding the right balance of time and money that works best for YOU is key...otherwise you're likely to keep pushing marketing further down on your to-do list, or you might end up feeling totally trapped by your own clock and wallet. Your sales (not to mention your stress level) may very well suffer the consequences.

So what is the maximum amount of time you can afford to spend on marketing efforts without compromising your service levels and general operations? How many hours per week or month would this be?

What is the maximum amount of money you can afford to spend without compromising your business' net profit (the money you have left over after paying all your expenses)? How much money per week or month would this be?

There are several different business theories on how to calculate a marketing budget. If you aren't sure where to start, here are two calculations to try:

1.  Spend 5 - 20% of your total business operating hours on marketing efforts.

2.  Allocate 3 - 10% of your sales goal to marketing efforts.

Start out small, don't bust out of the gate so hard that you can't finish the race! Once you get a feel for your costs and routines, and after you have analyzed the results of your initial efforts, then you can adjust your time and money accordingly.

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