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Musings from the coach

Marketing Budget

Marketing a brand is more than just creating awareness about the product or service. Thanks to the advent of digital media, marketing is no longer limited to one-way communication. Social media platforms serve as active marketing channels for businesses, allowing customers to directly reach out to share feedback. This is where brands have to be extremely careful. Positive reviews can scale up the popularity of a brand in no time, while negative feedback can hasten its downfall.  Brand marketing under professional supervision is the solution to this problem, so you don’t have to be left alone wondering “what should my marketing budget be?”

Marketing is about promoting your brand in a positive light to build awareness, credibility, and interest among prospective customers. It’s not just about increasing sales. With numerous options to reach potential customers, marketing has become imperative for lead generation, attracting investors, and boosting conversion rates. Running a business without marketing is like trying to drive a car without fuel. 

So, if you’re trying to figure out the right marketing budget for your business, read on. This article discusses all aspects of the marketing budget to answer the question “how much should a small business budget for marketing be?” Or what is the average marketing budget for any business? 

Why do you need a Marketing budget?

Now that you have realized the importance of marketing in a business, the next question is: What should my marketing budget be? This is a common consideration among companies who haven’t yet immersed themselves in the nuanced world of digital marketing. Sometimes brands might think that since business is thriving, it’s fine to have a small marketing budget. This isn’t the case. The impact of having poor or inadequate marketing will impact the business adversely later if not sooner. 

On the other hand, some businesses might think spending a huge, unchecked amount on marketing will boost growth faster. This can be just as detrimental, as it can negatively impact capital in the long run. Having a standard marketing budget not only helps a business run smoothly, but makes it easy to plan a killer marketing strategy. 

What does a marketing budget include?

Considering the endless options of both on and offline marketing channels, brand marketing cannot be limited to advertisements only. A marketing budget can include expenses on, but not limited to:

  • Website design and maintenance
  • Social media promotions
  • Search engine optimization (SEO)
  • Copywriting
  • Email Marketing
  • Mailings
  • Paid Advertising
    • Google Ads
    • Magazine Ads
    • Billboards
    • TV Commercials

Apart from these main elements, companies should also factor in the cost regarding hiring a professional to figure out a marketing strategy. Their guidance can help decide what amount from the total marketing budget will be spent on each area. 

What is the average marketing budget?

The average marketing budget for any business should be anywhere between 2 to 10 percent of the annual revenue. This applies to the marketing budget for small businesses as well, but there are certain factors to consider. The 2 to 10 percent range is common in any type of business and thus considered an average marketing budget for businesses in general. 

To simplify the calculation, here is an example. For instance, if your business generates annual revenue of $1 million then the average marketing budget can safely be somewhere around $20k to $100K. The range can go higher depending on the type of business and its marketing goals like traffic, awareness, sales, conversion rate, etc. 

How much should a small business budget for marketing be?

The marketing budget for small businesses is crucial because they need both visibility and collateral investments. While a low marketing budget can slow down growth, higher spending on marketing can impact the capital. According to the U.S. Small Business Administration, the marketing budget for small businesses should be between 7 to 8 percent of gross revenue. 

A business generating annual revenue under $5 million from sales with a net profit margin of 10 to 12 percent is considered a small business by U.S. Small Business Administration. The calculation might change if you consider the marketing budget for start-ups. This is because start-ups are going through the most challenging phase of a business where budget constraints are a common issue. This is where the marketing budget for small businesses and start-ups differs. 

For start-ups, it is advisable to allocate only 2 to 3 percent of annual revenue in marketing and promotions. However, considering the type of business and its marketing purpose, a broader margin of 1 to 10 percent of the annual revenue is possible for the marketing budget. 

What is the average marketing budget for big companies?

The figure differs when it comes to the average marketing budget for big companies. A look into the percentage paid to the affiliates of global corporations like Amazon and Google might provide a clearer idea. Google pays up to 40 percent of the profit to the affiliate who brings revenue to them. While in Amazon, the calculation is slightly lower because of its extensive online presence and dominance over digital platforms. 

At big corporations, the average marketing budget can reach 25 to 45% of annual revenue for new product launches. For SaaS companies, the marketing budget can be almost half of the annual revenue depending on their marketing goals. In some cases, the annual marketing budget for SaaS companies can be around 80 to 120 percent of revenue. It then plateaus gradually through a lesser percentage of marketing budgets in the following 5 years. 

What should my marketing budget be?

For any business showing promising growth, the average marketing budget should be between 2 to 10 percent of annual revenue. This is the standard calculation of the U.S. Small Business Administration and is highly recommended for any business that is still in its developing phase. To be more exact, the range can vary between 4 to 6 percent and not beyond or below it.

Some companies might spend up to 20% of net sales as a marketing budget, but only if they have specific goals. The exact calculation of the marketing budget depends on different criteria of the business apart from marketing goals. 

Factors to consider while deciding the marketing budget

The factors that determine the percentage of marketing budget to be allotted are crucial for any business. In fact, it’s the first step in any business to figure these out before asking “What should my marketing budget be?”

Below are those determining factors of marketing budget that more or less are common to any kind of business. 

Industry Type

Different types of businesses can have different ranges to calculate marketing budget. For instance, a B2B should spend less on a marketing budget compared to a B2C company. This is because a B2B company has specific customers it wants to reach, and usually knows how to attract them.

For a B2C company, the customer base is not specified and generally involves a larger section of consumers. They need a higher marketing budget to promote on various channels to reach all segments of potential customers. 

Business Size

As mentioned earlier, the size of the business is crucial to determine the marketing budget from the annual revenue.

For start-ups, the marketing budget can be a huge constraint. It’s advisable to keep the percentage lower, but not zero. This is because marketing is an important tool to boost growth through sales and build brand awareness. Medium-size businesses can risk a higher percentage on marketing budget depending on its focus. For large corporations with more capital, there isn’t necessarily a set limit on the marketing budget. A higher marketing budget can be balanced with increased sales and conversation rates.  

Marketing Goals

Every marketing campaign should have a clear goal to effectively plan out its strategies. For instance, launching a new range of cosmetics might need visibility across all marketing platforms. Whereas launching an app or any software will have more focus on digital marketing platforms.

Apart from the target audience, there is another way in which the marketing goal can impact the marketing budget: the expected result from the campaign. Some marketing strategies may be solely planned to generate leads and increase conversion rates, while others may be targeted at building brand credibility, creating awareness, or getting customer feedback. Depending on the target result, the marketing strategy decides the focus and the budget it will require. 

Potential Expenditures

The marketing budget for businesses is only one of the mandatory expenses companies should consider to scale up. Generally, companies have to take into account several other expenditures also like employee salaries, infrastructure, product development, and more. The percentage allotted for the marketing budget should not impact any of these expenditures. 

With this, you’re hopefully able to answer “What should my marketing budget be?” Or “how much should a small business budget for marketing be?” Considering all the points discussed above, small businesses and developing companies can safely and effectively plan a marketing budget.

How to Find the Best Business Coach

The grind is real, the hard work feels never-ending, but you promised yourself you would never give up on your dream. You have sacrificed more than your share to be where you are today. But you know deep down that to achieve the next level of success, you need guidance and support. This can come in the form of a business coach.

You’re right. And the weight of your business success does not have to rest completely on your shoulders. As Bill McCartney wisely said, “All coaching is, is taking a player where he can’t take himself”.

When it comes to business growth, many entrepreneurs feel they can go it alone. While there’s some truth to this statement, most business owners will hit a plateau and need help to reach the next level. That’s where a business coach comes in.

Whether you’re looking for a small business coach or would like to avail of the convenience offered by an online business coach, the benefits of utilizing one can be exponentially helpful for business owners who feel stuck, or need help to reach new heights. 

With an online business coach, there’s no longer a need to ask yourself questions like, “How do I find a business coach near me?”. Depending on your area, a business coach may be hard to come by. Not to worry! Thanks to technology, an online business coach can meet with you wherever you are!

Benefits of a Business Coach

 A good business coach will assess your current situation, create achievable goals with you, offer support along the way, and hold you accountable. This can help you:

  • Navigate rough waters
  • Improve communication within your company
  • Develop a winning strategy

And most importantly…

According to the College of Executive Coaching’s article, “The Benefits of Business Coaching”, a study of Fortune 1000 companies using coaching showed the following astounding percentages, reporting the benefits executives witnessed in their businesses from the coaching they received:

  • An increase in productivity (by 53%)
  • Increased customer service (by 39%)
  • Increased retention of senior people (by 32%)
  • Reduction in costs (by 23%)
  • Increased bottom-line profitability (by 22%)

That’s an astonishing growth of nearly 170%!

Finding the right business coach can be a daunting task. You want to make sure you connect with someone who understands your business and has experience helping others reach their goals. It’s important to do your research and ask around for recommendations. Once you’ve narrowed down your search, take the time to interview potential coaches until you find one that is the perfect fit for you and your team.

The bottom line? A good business coach can help ascend your business to the next level.

A good business coach can help you achieve your goals and reach new heights in your business. How do you find the best business coach for your needs, you ask? Keep reading to find out!

If you’ve ever wanted to find the best online business coach, then you’re reading the right article. That’s because you’re about to discover an easy 5-step system to equip yourself with all the right knowledge to find the best business coach to skyrocket your business past its current plateaus.

Step 1: Assess the needs of your business.

An assessment is vital. It enables you to know what needs you must fill for your business. To get started with your assessment, ask yourself questions like:

  • “What areas would my business benefit from outside help the most?”
  • “What goals do I want to achieve for my business in the next six months?”
  • “What’s most important to me when it comes to finding the right coach?” (Examples may include credentials, pricing, reviews, etc.)

Once you have a good understanding of what your business needs, it’ll be much easier to narrow in on the business coaching services that will fit your needs.

You’ll want to get the most out of your decision to avail of a professional business coach, so taking the time to assess your business in advance will pay dividends down the road.

Step 2: Check out business coaching service reviews.

Doing a quick online search for “best business coach reviews” will give you access to a variety of independent review websites that’ll help you shortlist potential coaches. Reading through customer testimonials is a great way to get a better idea of the track record of each business coach and how they can help you. You’ll get to see real-world examples of how the coach has helped other businesses, which can be useful in envisioning your fit as a client.

When searching for a business coach, remember that they come in all shapes and sizes. Some are great with organization, others excel with communication skills. It’s important to connect with the one who meshes well with your style so that you can get the most out of each session.

It’s imperative to note that you find a business coach that’s the right fit for your unique needs. Not every coach is right for every business. Do some research on the types of services each offers and see which ones resonate with you and your goals. Then, keep track of ones that fit you and your business the best. This will make your decision process a lot easier down the road.

Step 3: Create Your List

Once you’ve compiled a list of 5-10 business coaches, take some time to research each of them individually. Here are 8 key areas to explore when researching your list of business coaching services:

  1. Level of experience.
  2. Skillset.
  3. Education/certification.
  4. Background.
  5. The extent of services they offer.
  6. Rates.
  7. Social media presence.
  8. Personality.

Write out a small summary of each criterion for every individual business coach. Once you’ve gone through your list and run through all 8 key areas, it’s time to sift through and find the best fit.

Scan your list and number each business coach following the key areas explored above. For business coaching services that offer high levels of experience, put a #1 by their name. And for those who excel in their level of skill set, place a #2, and so on. Do this until you reach number 8, then take note of which business coaching service aligns most with the 8 key areas.

This should give you a solid idea of who’s the best fit for you. One thing to note here is that you may value one key area over another. Not to worry, you can use this as a guide, but going with your intuition is as important as weighing the options. This exercise is used best to narrow down your decision to 1-3 business coaching services. Although this guide is designed to find you the best fit, ultimately it’s up to you to decide which one you want to work with the most.

Step 4: Interview the Business Coach

Once you’ve narrowed down your list to 1-3, it’s time for the next step: interview the business coach. This is a key step to see how well you would work together. During the interview process, be prepared with questions that will help assess whether this business coaching service has what it takes to help you reach your goals. Some questions you can ask are:

  • How does this work?
  • Why do you feel you can help me?
  • How would you approach my specific situation?
  • What results do you guarantee me from using your services?
  • Can I contact some of your previous clients?

Once you’ve gone through these questions, you’ll begin to understand how comfortable you’ll be working with each specific online business coach. Getting a feel for your level of comfort is important; you’ll be spending a good amount of time with this person. You’ll also be sharing personal details about your business and goals. You need someone you can trust when it comes to helping your business climb the ladder.

Once you believe you can form a solid foundation with the business coach who’s checked off all the boxes and made the greatest impression on you, it’s time for step 5.

Step 5: Pull The Trigger

This is it. You’ve come to a decision and you’re going ahead with hiring your business coach. Congratulations! This is an exciting time for your business; there’s no telling how far you’ll go with the help of someone who’s been in your shoes before.

The best part about finding an online business coach? The majority of them offer a free consultation so you can test the waters before diving in headfirst! This way you can experience some results firsthand.

When you’re ready to dive in, be sure to have these 3 necessities prepared:

  1. Your business goals and objectives for the next 3, 6, and 12 months.
  2. A little information about your company including size, location, and years in business.
  3. How much you’re willing to invest in coaching.

Being able to use battle-tested methods from a business coach is a valuable opportunity. You’ll have someone to help you map out your goals, assess your progress, and give you the occasional push in the right direction when needed. This is an investment that can pay for itself in no time.

Finding the best business coach will catapult the success of your business farther than you could ever have pulled it along by yourself. Now that you’re prepared to give your business the game-changing opportunity of business coaching, it’s time to have that insurmountable weight lifted off of your shoulders once and for all. You’ve earned the right to release the doubt, fear, and worry that comes from the unknown future your business once held.

With your #1 business coach secured and by your side, it’s time for your hard work to take flight, your dreams to soar and your success to skyrocket.

And there you have it – a simple 5-step system for calling in the big guns to terminate any obstacles standing in the way of your success. Now that you know how to find the perfect coach to secure the future of your business, there’s one thing left for you to do: trust the process.

Draw upon the belief of your new business coach, and soon others will knock on your door looking for their key to success.

Larry Vivola

Larry Vivola is a successful business coach who coaches entrepreneurs anywhere in the world via Zoom. If he’s not coaching he’s making meatballs and entertaining friends and family!

Constructive Criticism

One of the most challenging yet beneficial parts of being in a leadership role is providing constructive criticism. It can be difficult to deliver negative feedback to an employee or coworker. Yet, if done correctly, constructive criticism can be incredibly beneficial. It allows you to express exactly what expectations aren’t being met, and gives the recipient a new perspective on how they can improve. 

For those unfamiliar or uncomfortable with delivering constructive criticism, I’ve created an in-depth guide to facilitate the process.

The issue here is that often you’ve seen the same problems over and over with your executive or employee, and they need to make changes and they haven’t made these changes. That’s when you really need to address them in a more specific and maybe intensive way.

Script: 

“Matthew, in the past month, you’ve made two major decisions that touch the product team and the marketing team without consulting them or even letting them know you’ve missed the opportunity to get their feedback, which would be valuable and their input, which is essential to the success of our project. And now I’m concerned that because they haven’t been in the loop, they’re not going to CO on the process with you. So it’s gonna be much harder for us to finish this project. We’ve talked about this before. And you told me that you’d make sure to get people’s input before you made decisions. I need you to fix this one problem by going and talking to these folks right now. And then even more critically, I need you to operate differently from now on. You’re not going to be successful and we won’t be successful as a business if you don’t collaborate a lot more closely. I’d love to hear back from you by the end of the week about your plan to solve this once and for all. I’m here to help you if you need me. And I’m more than happy to talk through your plan. But I need you to take ownership of this issue and fix it.”

Tip: 

Here I have communicated to them the seriousness of the issue. This specific thing you want them to go and fix, and the timeline that you want to hear back from them, it’s not just going to fall off the radar that you’ve actually agreed on a timeframe, they’re gonna come back and give you a plan. That’s important to make a forward motion. My suggestion to you is that you roleplay, this, I know, you don’t want to roleplay it, nobody wants to roleplay. But I really encourage you to do that. Because first of all, it’s going to help you get your tone neutral. And that’s going to possibly reduce defensiveness and set up actually a good dialogue after this conversation, which is important.

Constructive Criticism: Follow-up

 Now, let’s assume that you’ve had a couple of these conversations and things have not improved, that is disappointing. But we have to get to the conversation before the firing conversation. You never want people to be surprised when they get fired.  And you also want to tell yourself, I did everything I could to help this person make changes, and I communicated to this person and the person should not be surprised. So that’s why it’s important just for you and your own sanity.

Script: 

“Camelia, we need to have a serious conversation. You and your team have consistently not met your goals or even come close. And as a result, we’ve had to move the new product launch twice at the last minute. I know things come up. But your job is to anticipate what those things are. Manage your team to deal with them and work with your peers to coordinate all of it. And I don’t see you doing that. What I need you to do is immediately debrief with your team and your peers, pull together a launch schedule that will meet our business goals, and then make that date. If you can’t do that within the next two months, I’m sorry to tell you, I’m going to have to find a new leader to take your role. And we’re going to have to part ways. I’m telling you this because I want you to know where I stand on this. And I want you to take it seriously. If there’s anything you need for me to help you improve, let me know. I want to hear back from you by the end of the week about how you’re approaching this.” 

Script: 

“Matthew, we need to have a serious conversation. We’ve talked in the past about my concerns about you making unilateral decisions about areas that affect other areas of the business. Collaboration and transparency are super important values here. And if you keep making decisions in a vacuum, you aren’t being collaborative or transparent. You’re also not getting good ideas from others, you’re surprising people, and you’re not getting buy-in from the people that you need. You’re also making people feel dismissed. It’s not a sustainable way to work. I need you to know that if you can’t fix this issue, we’re going to have to part ways. I’m telling you this because I want you to know where I stand. And I want you to take it seriously. I need you to fix this immediately by mending fences with your peers and employees and taking into account their input before key decisions. If there’s anything you need for me to help you let me know, I want to hear back from you by the end of the week about how you’re approaching this. And I need to see improvement within 30 days.”

Tip: 

Now, this is definitely one you’re going to want to roleplay. And remember to stay even-keeled and be ready for discussion after this, I can’t give you a script for an unscripted dialogue that’s going to take place after you land this one. So in your roleplay, think through how your employee might respond. And what you might say during the discussion that will follow. When you prepare for what they say in response and practice getting your mouth around the words of the script, it will make you feel much more confident.

Quote

“Wise people prefer to benefit from constructive criticism rather than be ruined by false praise.”

— Shiv Khera

Gillette is the brand known to have revolutionized the method of shaving generations ago, and still has a hold on the industry decades later. Gillette is synonymous with razors, but not many know the true story behind how this multimillion-dollar business came to life. As it is known, King Camp Gillette is the inventor of the first safety razor for men and also the founder of the brand which later developed into a colossal grooming corporation. However, this is not the case. There was someone else in the picture.

William Emery Nickerson, the partner of King C. Gillette, was the original mastermind behind the invention of the first safety razor. Back then, it was perceived that selling a product under the name of Nickerson might lower its brand value. After all, no one wants to nick their skin while shaving! In addition, the idea to invent such a tool for shaving was of King Gillette’s, and Nickerson only shaped his idea through innovation. 

The story begins in 1895 when King C. Gillette conceived the idea of disposable blades and safety razors. Back then, portable shaving devices were used that were called “cut-throat razors” by traveling salesmen. The device was a wedge-like heavy metal blade with a top handle. When dull, the wedge was stropped by hand until it was completely sharpened. The device was very risky to be used in trains while traveling and thus it got such a name. 

As King C. Gillette started his research on safety razors he met several metallurgical experts to find a way to shape his dream. He was told by these metallurgists that mass production of such a thin metal blade that will be disposable was not feasible. Thankfully, this could not deter King C. Gillette’s spirit as he was determined to revolutionize shaving. It was during this time King C. Gillette met William Emery Nickerson, a graduate of the Massachusetts Institute of Technology and a trustee of Boston University. King Gillette partnered with Nickerson, and after 6 years, Nickerson invented a successful method to create disposable blades. 

In 1901 the duo came up with all the necessary equipment to mass-produce the disposable razors and soon patented the invention. King C. Gillette started his company by the name American Safety Razor Company in the same year. The company was later renamed “Gillette Safety Razor Company” in 1904. The safety razor disrupted the market by replacing old shaving devices. The safety razor and disposable blades revolutionized shaving technology for future generations. 

The blades and razors were sold with the picture and name of King C. Gillette, earning him stardom almost overnight. By 1910 King C. Gillette was already a millionaire. He even authored a few books on social advancement, besides devising killer marketing strategies for his brand “Gillette”. In 1926 King C. Gillette built his home on 588 acres of land in Calabasas, California. Presently, the property is a state park called King Gillette Ranch. 

The story behind the world’s first safety razor and its company is a fascinating one, especially since Gillette razors are present in millions of stores across the United States. This is all thanks to the vision of King C. Gillette and his talented partner, William Emery Nickerson.

Sales

If a business is a vehicle, a salesperson is an engine to drive it to success. Sales bring much-needed traction to a budding business by not only increasing revenue but also building the credibility of the brand. Even big businesses rely on salespeople to scale their reach and boost their revenue. Small businesses, however, may be skeptical. Some regard it as an expense instead of an investment. This is where they are failing to develop a strategy to grow their brand. 

Referrals are a great source of sales, but considering referrals as the main sales source would be an overestimation. Small businesses may think referrals are everything they need because having a sales team or hiring a salesperson isn’t affordable. This is not true. If referrals act as a sailboat, a salesperson would be a powerboat for the business. Here are a few reasons to hire a salesperson or a team. 

Helpful to deal with clients

Sometimes, brands cannot reach the client personally to address their needs and grievances. A salesperson can do it on a personal level, building a relationship with the client while also retaining the customer for life. 

Boosts revenue

Most brands have a go-to sales model that works for them, and the salesperson can follow it. It’s a tried and tested method to increase product sales and boost revenue. In fact, that is the sole intention or target behind hiring a salesperson or a sales team. 

Increase productivity

If the CEO of the company thinks they can manage sales themself, or a designer or accountant can do it, that assumption is wrong. Sales is an established job role on its own, and to do it, you need to sacrifice other tasks. So either way, the business is suffering. This is where a salesperson increases the entire team’s productivity, working to scale the business.  

Tips on Recruiting a Salesperson

Learn from category leaders in different business segments; in all likelihood, they have a huge sales team working behind them. There are endless creative ways to hire a salesperson if you have a small budget. Here are some tips on hiring and managing a sales team to quickly scale your business with limited resources: 

Adopt affordable recruiting policies

Salespeople can be hired in different ways to keep the marketing budget to a minimum. Try recruiting on a part-time basis or through earning a commission based on sales. This increases productivity while reducing the cost.  

Develop talent

Hiring a professional sales team can be a financial burden for a new business or a small company. In such cases, businesses can hire fresh talent who have the potential to convince people and are willing to work to deadlines. Now, develop these talents through proper training and mentorship. Over a period, such teams have proved to be an asset to a company. 

Focus on results

Keep the focus on results. A sales team’s performance is measured by the number of sales it gets for the company, and this is a good rule to follow. For a salesperson, the focus should also be on accomplishing the target within the deadline. Maintaining a team or a salesperson that is not self-motivated or result-oriented is an operational expense for the company, not an investment.  

Quote on Sales

“Sales enablement can’t be reactive. It has to be a full-blown strategy that’s woven into the fabric of the company.” – Roderick Jefferson 

Sales is no longer a marketing technique; it has become a business strategy for brands to grow their presence and increase revenue.

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