2nd Deadliest Mistake Entrepreneurs Make (Bad to Worst)

Not having a marketing budget

From our interactions with hundreds of Entrepreneurs, we realized that some of the main mistakes of an entrepreneur usually surface around them not making provisions for marketing.

Let me ask you. Do you have a marketing budget of at least 10% of your revenues? If the answer is no, then it’s time to create one. Marketing budgets are one of the most important aspects of running a business. Without one, it’s difficult to know how much money you should be spending on both digital and offline advertising campaigns that will help grow your company.

5 Mistakes of an entrepreneur who doesn’t have a marketing budget:

Frustrated business owner needs to solve his marketing budget problems. PTS is the solution

1. Gets limited reach and impact:

Without a marketing budget, it can be difficult to get your message in front of a large audience or to make a significant impact. This can limit the potential reach and impact of your marketing efforts.

2. Has difficulty tracking and measuring performance:

Without a marketing budget, it can be difficult to track and measure the performance of your marketing efforts. This can make it hard to understand what is and isn’t working, and to optimize your marketing strategy.

3. Has limited resources for testing and innovation:

Without a marketing budget, it may be difficult to allocate resources towards testing new marketing tactics or trying out new ideas. This can limit your ability to innovate and stay ahead of the competition.

4. Has difficulty building and maintaining a strong brand:

Without a marketing budget, it can be hard to consistently promote and build your brand. This can make it harder to establish your company as a thought leader in your industry, and to differentiate yourself from competitors.

5. Has a reduced ability to respond to market opportunities:

Without a marketing budget, you may struggle to take advantage of new market opportunities or to respond to changes in the competitive landscape. This can limit your ability to grow and adapt as a business.

Overall, having a marketing budget is an essential part of running a successful business. It helps you allocate resources effectively, track and measure your performance, and respond to market opportunities. Without a marketing budget, your business may struggle to reach its full potential.

2 ways to decide how much money should go towards marketing:

Growth focused

The idea is to allocate a specific percentage of revenue towards marketing efforts that will drive new customer acquisition and revenue growth.

Set a Growth based marketing budget to avoid the mistakes of an entrepreneur

The percentage of total revenue that should be allocated towards marketing will depend on the specific goals and resources of the company. For example, a company that is looking to achieve rapid growth may choose to allocate a higher percentage of revenue towards marketing, while a company that is focused on steady, long-term growth may choose to allocate a lower percentage.

In general, a growth-focused marketing budget will typically range from 10% to 25% of total revenue. This range is based on the idea that a healthy and sustainable growth rate for a company is around 20% per year.

Profit focused

The second way to determine your marketing budget is by determining how much profit you want to make. This is basically where you start by focusing on how much profit you want to make each year, then calculate how much you need to spend on marketing by dividing your desired profit by your profit margin.

Set a Profit based marketing budget to avoid the mistakes of an entrepreneur

Sounds complicated? No worries. Here is an example to make it clearer. Let’s say you want to make a profit of $50,000 and your profit margin is 40%. To achieve this profit, you would need to generate $125,000 in revenue ($50,000 / .4 = $125,000). If you opt to spend 10% of your revenue on marketing, you would need to spend $12,500 on marketing ($250,000 x .10 = $12,500).

Don’t be confused

Don’t let the numbers confuse you. It’s pretty simple and can be summed up in these words: More profit out requires more marketing budget in.

Not allocating a budget for marketing is one of many fatal mistakes an entrepreneur makes and can be potentially toxic to your business. It can cause irreparable loss of customers, revenue, reputation and even good employees.

Long term focus

It’s important to note that a growth-focused marketing budget is not a one-time investment. In order to sustain growth over the long term, a company will need to consistently allocate a significant portion of revenue towards marketing efforts. This might include a mix of traditional and digital marketing tactics, such as paid advertising, content marketing, social media marketing, and public relations.

Let PTS help you create a solid marketing budget

There is so much more nuanced information that you need to set a clear marketing budget and we definitely can’t go as in-depth here as we would like, but we hope this article puts you one step closer to reaching that success as a business owner that you deserve. If you’re currently making any of these mistakes – don’t worry! We have solutions for fixing any and all of them. Book a meeting with and expert Business Success Partner (BSP) now.