Let’s talk money!
Or at least let’s start the conversation with marketing budgets.
Over here at MAP Solutions Group we believe that marketing has one purpose for a business – increase the bottom line.
Most marketing goals don’t simply say “increase the bottom line.” Usually they sound more like- increase engagement on social media, increase the number of qualified leads, launch new product with $X in sales. However, the goal is that each of these initiatives will ultimately increase the bottom line.
What is the bottom line?
Some may think this next part is for the accountants, but it’s important to know for marketing purposes.
If you increase sales by $50,000, but spent $50,000 in marketing dollars to make it happen- that’s not a good ROI (return on investment)*. Your revenue may have increased, but your profit didn’t.
Revenue – the total amount of income created by the sale of goods or services (gross income). Simply put- your total sales.
Profit – the amount of income that remains after accounting for all expenses (net income).
Revenue – Expenses = Profit
The bottom line is profit is what you want to look at. Profit as a whole for your business includes all debts ,operating costs, etc. those are not marketing expenses. Creating a marketing budget will allow you to track what you plan to spend, and what you actually spend, against your revenue.
We recommend you rectify your projected spending against your actual spending and compare it to your sales monthly. If you can’t do it monthly (busy is a thing!), at least do it quarterly. Having this information is essential to be able to adjust your marketing initiatives to meet your goals.
*There are times when more marketing dollars are spent than profit is made. This is usually in the early stages of a business when they are working on brand recognition and getting into the market place.
Do you have a marketing budget? Is there something about creating one that you get stuck on? If you have one, what have you learned by using it? Tell us about it in the comments below.
If you’d like to learn how to create a marketing budget or would like a marketing budget created for you MAP Solutions Group can help. Connect with us today – email@example.com or 475-201-7200.