Create A Marketing Budget That Isn't Just Another Expense Line on Your P&L
As an emerging company seeking to expand your business and achieve the next level of growth, you know the importance of marketing and investing resources in it. However, when it comes to setting a marketing budget, questions like "What should our marketing budget be?" or "What is the most valuable investment of our marketing dollars?" often arise. At Agile Growth Shop, we believe these are the right questions, and that's why we've developed the Agile Growth Budget Planner - a powerful tool that helps you develop a marketing budget that is designed to flex with your company and its top line revenue.
The Agile Marketing Budget Template tool will walk you through the 3 steps:
Step 1: Historical Analysis
Start by listing your monthly gross sales ($ amount invoiced) & overall marketing/sales investment from the past 12 months. Include all monies paid to marketing & sales team/vendors & any software/ tools you use for sales and marketing. Determine the percentage of income spent toward sales & marketing activities.
Once complete, you'll have a historical baseline showing what percentage of your revenue you've previously invested into marketing.
Step 2: Establish Go-Forward Baseline
Once we've gained an understanding of what percentage of your revenue you've invested into growth, the next step is to establish a go-forward baseline. This baseline sets the foundation for your future marketing budget and strategy. It involves considering your business goals, growth objectives, and market conditions. There is no right answer for your company, but please consider some examples:
McDonald's invests about 2.5% of revenue into marketing
Startups and rapidly growing companies typically invest 10% or more of their revenue into growth
Most businesses we meet are typically investing less than 1% of their revenue into growth
The point here is that it's less important what the number is but that you establish a percentage of your gross revenue to invest into growth.
Step 3: Create Flywheel Budget
The final step of the Agile Growth Budget Planner is the creation of a flywheel budget. A flywheel budget is designed to keep the momentum of your marketing efforts continuously moving forward.
The flywheel budget is the additional percentage of the increased revenue you will reinvest into growth. Here's how this works using a simplistic example of $1,000,000 in monthly revenue and a 10% Growth Flywheel budget:
Targeted revenue month 1: $1,000,000
Baseline growth budget (3%): $30,000
Actual revenue month 1: $1,200,000 (your marketing performed well)
Flywheel Budget (10% of the growth revenue): $20,000
In this example, the following month, you'll be investing $50,000 into growth (instead of just your baseline $30,000).
As your marketing continues to be effective, you're pouring more gas into the marketing machine to make the flywheel turn faster and accelerate your growth.
Are you ready to establish your marketing budget? Download our free marketing budget template here:
Unlock Your Marketing Potential with Agile Growth Shop
In conclusion, the Agile Growth Budget Planner is the ultimate tool to unlock your marketing potential and accelerate your growth. By combining historical analysis, go-forward baselines, and a flywheel budget, we show you how to stop thinking about marketing as an expense and start investing in your company's growth.
At Agile Growth Shop, we are passionate about helping great companies thrive in the ever-evolving marketing landscape. Let us be your partner in achieving marketing excellence and propelling your business to new heights.
Ready to take the next step in your marketing journey? Schedule a consultation with our team of experts.
Together, let's embark on a transformative marketing journey and accelerate your success!