How Much Should a New Business have in their Marketing Budget?

Marketing is an essential function of any business who wants to draw new customers. Whether B2B or B2C, you have to promote your business so people know you exist — you need a marketing budget. Today’s marketing is way more complicated than before which makes it crucial for small business owners to carefully plan and research what marketing options will be most effective both with cost and results and set aside funds in a marketing budget.

But How Much Does Marketing Cost?

How Much Should a New Business Budget for Marketing?

That depends.

For a local business, you should consider print as well as digital. For an online or consulting business, the Internet holds a lot of choices that may work for you.

Let’s look at all the Aspects your Marketing Budget:

Website:

First, you need a website. Your website should be a 24/7 functioning sales person for you. It needs to be branded properly with calls-to-action to capture leads and most importantly, optimized for the search engines (SEO). Yes, there are free and do-it-yourself (DIY) platforms out there, but I don’t recommend them. What could possibly go wrong if you try to build your own website? Click here to find out. 

Your website also is the center of your whole online image. You should also have an “About” page which tells who you are, why you do what you do, etc. This goes towards building credibility. People buy from whom they know and trust. Transparency is key for a potential customer considering purchasing your products or services. 

Budget for a Website:

How Much Should a New Business Budget for Marketing?

Depending on what you need it to do, ie, shopping cart or booking system, it may cost from $5,000 – $10,000+.

A very simple, well-done website with 5-10 pages could run you from $1000-3000.

Do your due diligence before you hire someone. Google them, read reviews, look at other websites they’ve done. Just because they say the can build a WordPress site, doesn’t mean they know everything about WordPress and follow best practices. Furthermore, just because they are listed in a web hosting company’s site, doesn’t mean they know what they’re doing. 

Social media needs to be integrated in the website. Check out their social media accounts. Are they active? How many followers do they have? What do they blog about? Does it seem like they know what they’re talking about?

Understand the difference between a web designer and a web developer.

The difference may be obvious at first — the designer is more creative and the developer is more technical. You really need both. The designer is the person that’s going to look at the aesthetics — does it look good to the visitor? This person will also be in charge of basic functionality — the navigation, calls-to-action (CTAs), etc.

The developer covers the back end — security, backups, the technology behind the functionality. The designer tells the developer where to put the CTA. The developer makes sure it works like it’s supposed to.

These are two aspects that must be considered. Sometimes you can get the designer and the developer in one person. Most times, they are part of a team.

Whoever you hire, they must be knowledgeable / experts on…

  1. Whatever platform you’re using, ie. WordPress, Shopify, Etsy, etc. Ask for samples. Contact the company and ask if they were happy with the designer/developer. ask… 
    • How many websites have you created on this platform? 
    • How long have you works with this platform?
    • Are you aware of all the recent changes/updates, etc. 
  2. The technical aspects of search engine optimization (More on SEO below). Every page must be optimized following Google’s specifications. The site must also pass Google’s Page Speed Test so that it loads quick enough on a mobile device. Otherwise, Google will demote you in their search results page. 
  3. Your potential customer’s buying journey. The UX, or user experience is critical. A bad UX will cost you sales! The designer/developer must consider the User Interface (UI) when building your site. 

Copywriting

This is a combination of skill and talent. The right words on a webpage can lead the visitor to what you want them to do or it can make them leave your website forever.

Get quotes from at least 3 designers/developers.

If you are thinking about doing it yourself, which you certainly can — the question is should you? Read this first….

Domains

This is your web address or URL. Domain names cost about $12/year. You don’t need to buy all the versions. Try to get the .com. This is NOT your trademark! That you have to register with your state or national agency.

Hosting

Hosting is next. This is where your website files are going to sit. Shop around. Compare apples to apples. One company is cheaper for the first year, but more when renewal time comes around. Another gives you 25,000 visitors per month when another only gives you 10,000. That’s something you need to think about. Typical costs are around $4.00/m and you pay annually. You can usually save if you buy 3-5 years worth.

Website Security

The last think you want is to discover that your site has been hacked. It has to be rebuilt. Major headache! It will behoove you to find someone to manage your website, protect your site and clean it up if it gets hacked. If you don’t do this, you risk your website being hacked, infected with malware or being held for ransom. Cybercrime in on the rise. Security is crucial. You may think that you’re too small to be hacked. Not so! 

Hackers use bots to crawl the web looking for website with vulnerabilities. If your site isn’t protected properly, if it isn’t updated with all the latest security and platform updates, it’s vulnerable. I know. My site was hacked twice in 2014 and I lost a lot of content that I had to recreate. Not fun. After the second time, I hired someone to redo it and protect it. Protection, usually billed monthly, costs between $50-100/m

A good website maintenance company will not only protect your site, they will…

  1. Run regular malware scans
  2. Report on a monthly basis
  3. Set up daily backups, so that if you are hit or something else happens, your content is not lost. 

Likewise, if you are on an ecommerce site like Shopfiy of Etsy, they should cover all the backups and security. Always check to see what is in the services they provide. 

Your website must be up, running and ready for primetime BEFORE you start any campaigns or promotions anywhere. You may want to do some “coming soon” teasers. That’s part of the planning process.

SEO (Search Engine Optimization):

You want to be found when someone is searching for what you have to offer. Yes, you can hire someone to do your SEO, but you can do it yourself with keyword research, regular blogging and being active in social media. However, if you want to outsource this, figure on anything from $350 – $500 upfront fee for optimizing your site, and then an ongoing fee of $100 – $500 or more a month for monitoring and blogging. See social media below…

Graphics:

Sure you can use free tools like Canva.com to create graphics if you are so inclined, but you may want to have your logo and social media cover graphics professionally done. Depending on the designer, they can charge from $50 – $100/hr and based on how many redos, can cost from $200 – $1000+.

You want to have quality graphics as these portray your online image.

You’re also going to need graphics for promotions. Canva can help you there, too.

Market Research and Planning:

Because there are so many marketing channels, you need to determine your target market niche(s). This requires some research. You can do it yourself by searching online for the information you need on your specific target(s) and the economic overviews of your particular industry. Then based on the research, developing both strategic and tactical marketing plans. Hiring this out will cost anywhere from $500 to $1000 depending on the type of business it is.

Social Media Marketing:

You don’t have to be on ALL the networks. Just the ones that your target market frequents the most (you’ll learn this from your research) and where you’ll get the most exposure and SEO. You can learn how to do this all yourself, but know that it takes more work up front to build a following and search for your target market on the networks. You also need to produce content. (See the next section).

Just posting willy-nilly on Facebook is not social media marketing. That’s a waste of time. If you hire someone to do it for you, plan on spending from $500 – $750 up front for setups and ongoing from $750 – $2500 a month, again, depending on your business and target(s). Furthermore, if you think that you can trust your social media marketing to a high-schooler, college student or intern, think again. First, they don’t last very long. They’re inexperienced and they don’t know marketing.

Just because they know how to post on Facebook and Instagram doesn’t mean that they know how to MARKET a business on Facebook and Instagram. There’s a big difference. Plus, this is YOUR BUSINESS, YOUR LIVELIHOOD. You’re going to trust an inexperienced person? That’s foolish.

There are many free online tools for scheduling and automating, but keep in mind that as with learning any new software program, there is a learning curve. It will take you more time at first until you get used to it. The majority of these free tools have upgraded versions with more features. They can cost from $10 – $50+ a month or $50 – $400+ a year. Compare and try them before buying. Make sure they do what you need them to do. Read reviews.

Social Media 1:1 coaching & training

Blogging, Videos, and Other Content:

How Much Should a New Business Budget for Marketing?

Google wants fresh relevant content written for the human reader. Video marketing is also hot and fairly easy to do. Pictures and podcasts are also good content. Much of these you can do yourself, but again, it’s time-consuming. AND they need to be good quality as these reflect your company’s image.

Blogging

A good content marketer/blogger will cost around $50-75 per post (300-500+ words) and you need to have a fresh post at least once a week, 2-3 times a week is optimal. Make sure when you hire a content writer that the articles are unique and have never been published before on the web. To be sure, ask them to send you a sample. Then, copy the first paragraph and paste it into the Google search box. How many times does it come up? If it’s once or twice and it’s under the same company’s websites or social media, then it’s OK. If you see it come up more than 5 times in different business’ websites, then they are mass produced and you don’t want that. 

See, Google gives authority to the first time an article is published. That’s why you always want to publish the article first on your website, then share it on social media, duplicate it on LinkedIn or otherwise repurpose it. 

Consequently, if you do hire someone to blog for you, make sure that they are creating original content. Put that in a written agreement.

Learn to Blog on WordPress Gutenberg

Videos

Depending on the extent on the type of video marketing you want done, a short, professionally 2-minute video can go for $100 – $400. Longer, more complex productions will, of course, cost more.

Podcasting

Doing podcasts requires some sort of recording, hosting and distribution system which may also have a cost. Podcasting also takes planning and maybe even having other people involved. Check out this article for more info on podcasting.

Print and Direct Mail:

You may want to use some old-fashioned print and direct mail advertising. Especially for local businesses, these may be an effective option. Postcards are the most affordable. Depending on how many you are sending, printing and the paper stock they can cost from $250 – $2000. You also need to buy a list and that cost will vary with how many names and what contact information you want. Shop around. And, no, you can’t buy email lists. It’s against the law. Build your email list organically with a lead capturing offer on your website and draw them in with good content. Here is more info on email marketing automation.

Paid Online Advertising:

If you want to get more instant exposure, especially for a local business, you might want to invest in some Pay-Per-Click (PPC) ads on Google, on the Social Media Networks as well as on blogs and sites that your target frequents. Again, based on your research, you’ll determine which networks are best for reaching your target market.

With PPC, you don’t get charged unless someone clicks on your ad. You have to pay up front, say, $25 for one week, and on most of the networks like Facebook, Instagram, LinkedIn, Twitter, and Pinterest, you can target people by location, age, gender and in some even likes and interests. Moreover, having a strategy on what you want to accomplish with the ad beforehand increase your chances for success. What’s nice is that you can track it and the networks have comprehensive reporting systems.

So, for budgeting purposes, set $25/week. Any less than that won’t give you the reach you need. Yes, you can hire an agency to place your ads for you, but there is a cost. I suggest using each network’s advertising departments. They want you to succeed as that’s how they make money.

Putting Your Marketing Budget Together

By now you’re probably thinking, “Why do I want to get into business?” Well, I highly recommend working with a SCORE mentor for FREE. Yes, some things are still free! Both SCORE and the SBA have tools and offer assistance in getting funding so you can put all this in a business plan that makes sense. Yes, you need one of those, too!

One thing you must remember….

Put Your Best Foot Forward — Always!

This is no time to be lazy or to think — “it’s good enough”. Use quality graphics and videos. Proofread your website pages, blogs, ads, even your social media posts.

There’s a lot of competition out there. And not just your direct competitors, but competing for people’s attention online. Prepare, plan and be patient. It doesn’t work overnight.

If you want to go the DIY route — if you don’t have a marketing budget, figure you have to invest some sweat equity. I wrote my ebook, The Blueprint: Strategies for Effective Social Media and Digital Marketing just for you. It’s a step-by-step guide to digital marketing.

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This post original appeared on the Greater Phoenix SCORE blog

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How Much Should a New Business have in their Marketing Budget?

Giselle Aguiar

Giselle Aguiar is a social media, inbound and content marketing specialist and trainer helping business owners learn how to leverage the power of social media marketing, increase traffic to their websites, generate leads, increase brand awareness and establish themselves as experts in their fields.