Most entrepreneurs are aware that in order to be successful in business they need to have great marketing. And when presenting your idea to investors or bankers, they’ll want to see that you’ve put some thought and effort into the business plan marketing section.
That’s why you need to do a realistic analysis of what you’ve laid out in your plan, and determine if there’s anything missing. You also want to make sure you are looking for any common mistakes that people often make in the business plan marketing section.
To help you avoid these pitfalls, let’s look at two common mistakes and what to do instead.
Common Mistake #1: Listing a “Miscellaneous” Marketing Expense
If you decide to throw a pile of unallocated items into a miscellaneous bucket, that’s a problem.
Your marketing budget should never be built based on “leftovers” or surplus that remains after all of your other expenses are covered. Marketing is a critical part of business success. It needs its own budget that can be used specifically for the purpose of marketing.
Now, if you’re looking at your business plan and you don’t have a miscellaneous category for your marketing, don’t pat yourself on the back quite yet. There are many other ways in which you can make a misstep in this part of your business plan. Most of these ways are far less obvious.
Start by looking for any haphazard projections or generalizations, especially any overly neutral or non-committal numbers.
Specificity is important and that’s what investors and bankers will be looking for. Leaving things too broad can work against you. The risk you run by lumping in marketing numbers that don’t serve a specific purpose is it shows you don’t have a clear strategy. When it comes to marketing, an unclear strategy generally results in money wasted unproductive campaigns.
The solution to this is to create a smart marketing budget that includes set dollar amounts and measurable goals.
If you’re an existing business, this should be easier to do as you can look at historical data. What do you normally spend on marketing, and how will that need to be adjusted moving forward? Once you’ve figured that out, it can be added to your business plan marketing section.
For a startup business, you’ll need to consider both the medium and the platform you plan to use; be as specific as possible.
For example –
- Will you be using Facebook ads? If so, how much will you need to spend on them?
- Who is going to manage your social media? If you plan to hire a social media contractor, that’s a marketing cost.
- Are there any specific tools you’ll need in order to produce your marketing materials? How much will they cost?
Common Mistake #2: Being Afraid to Spend Marketing Money
You may think you can gloss over this part and not list a marketing budget at all. That’s another common mistake people often make.
Maybe your budget is small so you’re afraid to even try and make it work.
Even if you’re feeling uneasy about creating a marketing budget, it IS a necessity, because you need to spend money on your business. Fear of spending is not uncommon with entrepreneurs. It really boils down to an unwillingness to invest in your business.
The best approach to this is to expect and accept that there is an element of uncertainty. Good marketing always involves testing, especially in the early stages. Testing is a way to see how your offers perform before you spend too much time and money on a bigger launch.
After you test your early budget, then you can see where things need to be adjusted and create a smarter budget for moving forward. However, this won’t even be possible if you don’t take the first step and actually start spending on your marketing.
The role of marketing is to drive business. By seeing your marketing budget as an investment that you will see a return on in time, you’re looking towards meeting your broader business goals.
Why Marketing Strategy is Critical
As I mentioned above, marketing without a strategy is likely to not be as successful. But generating marketing results isn’t the only benefit a strategy is important for.
There are several benefits to purposefully calculating your marketing budget:
- A budget helps ensure you’re using your marketing money wisely and staying on track.
- It allows your original vision to line up with your outcome through the successful completion of projected goals.
- It acts as a standard for measuring the effectiveness of a campaign and making informed decisions on whether to move forward or cut back.
- Your marketing budget will serve as a clearly communicated model of the criterion for carrying out your marketing strategy to other members of your team.
If you’re looking for a surefire way to develop a solid marketing strategy for your business plan, I highly recommend you consult with a pro. The initial investment you make in developing a strong marketing strategy will definitely pay off down the road. By taking the time to do this before you put together your business plan marketing section, you’ll be able to show investors you’ve done your homework. You will have realistic goals for the future of your business.