When your business is faced with challenging situations and decisions, your leadership skills is best shown through your response. As the top dog there will be times you will be faced with when you need to address your finance allocation.
Change is all around you and keeping a steady course during those times is a challenge all in of itself. One of the common areas that most entrepreneurs will immediately look at cutting is in the area of marketing. As an entrepreneur your budget is not normally as flush as those Fortune 500 companies. As a result your ability to refocus or repurpose resources becomes a lot more stressful and difficult to do.
You have heard of the different types of marketing and it can be very confusing. I would like to support you in reducing your stress regarding marketing; there are amazing marketing coaches out there who can support you in creating a full marketing plan. They will help you to outline what is specific to you and your organization. But today let us focus on the basics. Then when you decide to hire a coach or consultant you have an idea of what marketing means to you and your business.
So what is marketing or a marketing budget and why do you need one? Simply put, marketing is defined as the process used to determine which products or services are of interest to your clients and outlines the strategies best used in the sales, communication and development of new business.
Ok, that wasn’t so simple. But basically matching your product or service with your client. The budget piece is the estimated costs for running of these programs and projects. And well, the why is basically all about transparency and empowering you to stay focused. To be moving forward in the right direction with each decision you make. Especially regarding spreading the word about your wonderful products.
All in the Details
Success is in the details. The more detailed you are with your ideas. Clear regarding your plans for spreading the word. The more effective you can be in your decision making when new opportunities are presented. Budgeting is about accounting for how you are spending your financial resources to ensure maximum exposure for each dollar invested. When times are financially challenging it can be easy to ‘stop’ a certain marketing activity. Especially since you can rationalize within your own mind that it will only be for a few months and then you can begin the activity again. Basically pick up where you left off.
Trying to pick up where you left off might be true to a degree but in reality not so much. Here is a visual for you. Your marketing efforts are a steam engine. Each of your marketing programs is one of the wheels. Your personal passion is the coal miner stoking the fire. And your financial resources or money is the coal. When you began your business you worked hard at building the engine itself, putting each wheel on and in place. Here are your six wheels:
- Facebook fan page
- Business cards,
- Local networking groups, and
- Professional organizations
With each new wheel you add, the easier your engine moves up the hill. That is your business is growing and becoming known. Your passion is put into adding more coal. When you feed the engine’s fire, the water will begin to boil (ie – client interest). Client interest goes up and you are moving towards your goals. Now you’ve built up momentum. Time to celebrate right?
Oh, no. Now you are facing a financial challenge requiring you to reduce the amount of coal you are feeding the fires. Thinking you have all of these elements in place. You have a good amount of speed. You feel cutting back and repurposing marketing funds for other expenses is a great solution. But now your train begins to slow down. The wheels are grinding and slowing even further until you are barely moving.
Hup, financial challenge is behind you and you are now putting more money into the marketing engine. You begin to start crawling. It will take a lot more of your personal energy, focus and passion to get the fires of marketing roaring again. You were there, then you weren’t and now you are again. Potential clients get confused and their attention span is small in the best of times. Once you’ve lost them, it is hard to get them back.
It’s doable but it will increase your stress level instead of alleviating it. So what do you do?
Questions for Leadership
This is where your budget and tracking processes support your decisions. Here are some great questions to begin thinking about:
- is your total revenue for the year?
- percentage where you spending on marketing before the financial challenge came about?
- is the total amount you need to cut back by?
As example is you were earning $100,000 per year. You were spending $5,000 on marketing (which is about average 5%). For you to honor your current situation what do you need to bring this percentage down to – 4%, 3%, 2%. Review how you can reduce the costs of certain marketing efforts before just discontinuing them all together.
Being an effective leader is about balance. Being able to know where to invest your resources is as important during good times as it is in challenging times. Remember there are a lot of free and low cost resources available to you. Your passion and business’s momentum depend upon your courage to raise your hand and ask.