11 Jul You’re Not a Real Company Until You Have a Marketing Budget
In 2015, I learned a very hard lesson. I had already been in business for six years when I was scolded for not knowing what my marketing budget was. It made me feel like a fraud – especially since I own a marketing agency.
I have since come to embrace the belief that a company isn’t “real” until it has a solid marketing budget in place.
When I have an initial sales call with a prospective client, one of the questions I ask is, “What is your budget?” I need to know:
1: If you can afford us
2: If your goals are realistic based on your budget
3: If you value marketing as a long-term investment in your business
Guess how many companies – established ones, new ones, small ones, rapidly growing ones – know what their monthly budget for marketing is?
Based on the conversations I have, less than 10% of companies have a budget in place.
This is why I got scolded about my marketing budget
Back in 2015, I hired Talmar Anderson for a year-long engagement to help me scale my company. She is now a hiring strategist, but back then, she was a management and operations consultant.
I had never hired a team, put processes into place or mapped out a long-term sales strategy. I had always just grown by the seat of my pants, blowing whichever way the wind took me.
The first thing we talked about was marketing. What was I currently doing, and what opportunities could I seize on?
“So, what’s your marketing budget?” Talmar asked.
“Um…” I replied, “I don’t know?”
“Monika!” Talmar’s eyes widened. “You of all people….”
“I know,” I hung my head in shame. “I know I should have a budget.”
“Yes, you should! So, here’s my rule of thumb: Your annual marketing budget should be 20% of your total budget until your per client conversion data can be measured.”
Obviously, I never forgot that conversation. (This is part of the reason I hired Talmar: I knew she would tell me like it is.)
And yes, now I have a marketing budget.
Why you’re not a real company without one
If you tell me you don’t have a budget for marketing, this what else you’re telling me:
You aren’t serious about growing your business, investing in long-term success and reaching concrete goals.
I have seen the results firsthand. When I look at past and current clients, the majority of companies who happily committed to a monthly budget in proportion to their sales are hitting their goals. The ones who skimped on marketing are stagnant (and are also no longer clients.)
We are in the business of helping our clients grow their own companies. Without a decent marketing budget, it’s not possible to grow consistently and sustainably.