Thoughts About Business


Creating Better Businesses with Budgets

Posted by admin on June 13, 2014

Building Better Businesses With Budgets

 From time to time, everyone’s business can slow down, which can make income and cash flow an issue.  At times like this, in order to create more sales, it might be a good idea to put a little extra money into marketing.  The problem, of course, is that income and cash flow are an issue, and conserving cash and reducing expenses seem to be what’s important at the moment.  There is an answer to having the funds necessary to support added marketing and feel good about spending those funds.  The answer is a marketing budget to support a marketing calendar.

Let’s start by defining what a marketing calendar is.  A marketing calendar is part of a marketing plan and schedules marketing activities over time.  Items on a marketing calendar could include outreach programs that happen consistently like a monthly mailing.  They can also include seasonal advertising such as a florist placing ads before Valentine’s Day, Mother’s Day and Easter.  The point of a marketing calendar is to define the necessary marketing for a business, and make sure it happens and on schedule.

 Which gets us to a marketing budget.  In order to support a marketing calendar, a business must commit to making the necessary financial resources to fulfill it available at the appropriate time.  For some businesses, especially small businesses, this can be a challenge.  What happens if the business is slow and short of funds?  How can you spend money you don’t have, or are conserving and afraid to spend?  This is where a marketing budget becomes useful.

 Once a marketing calendar is defined, the resources necessary to fulfill it can be estimated and the money put aside.  This can be done monthly in even amounts, or in planned amounts during seasonal good times.  In any case, there should be a plan to put the money aside.  This will ensure that the resources are available when the time comes.  This will likely create conflict with other financial needs of the company.  This is good.  It forces prioritizing the resources of the business.

 Most businesses are not so lavishly funded that they can spend any amount they want at any time they want.  They have to prioritize the use of financial resources so that the business gets the most benefit for the money spent.  Businesses deal with this resource conflict all the time.  Marketing v employee head count.  New equipment v paying down debt.  A new product v a new facility.  But all these decisions start with a budget.  Not only for marketing, but for all types of expenses.  It’s part of business planning.

 Most people think of budgets as an amount of money over which you should not spend.  And this can be true.  Equally important, though, is making sure money is available for planned investments in the business.  All of which means that you need to plan what your business is going to look like and how it will operate in the future.  Having a plan and a budget will allow you to be in control of your business.  So do you have a marketing budget?  How about a technology and equipment budget?  An employee expense and outsourcing budget?  Give it some thought and I think you’ll see the benefit of budgets.