How Your Business Plan Affects Your Budget
Goal setting is a common part of establishing a business plan. When you’re trying to grow your business, you need to know which direction you want to move in. However, your goals will influence more than just your strategies; they will also dictate your budget.
Your marketing budget provides you with the funds you need to grow your business. However, knowing how much money you have to spend and understanding how that compares to what you’re attempting to achieve will also influence the marketing strategies you choose. By being as specific as possible with your primary and secondary goals, you can create a realistic budget that helps you achieve them.
Let’s take a closer look at how you can use your business goals to create a more accurate marketing budget!
- Establishing primary goals enables you to create a big-picture plan to work towards.
- Secondary goals will help you break down big dreams into more achievable accomplishments.
- You can use your secondary goals to establish budget-friendly marketing strategies, bringing you closer to achieving your primary goals without breaking the bank.
Establish Your Direction with Primary Goals
When you first create your business goals, you’ll want to think far off into the future. Consider what you’d like to achieve in the next one, five, or ten years. These targets will become your primary goals. While they may not be achievable within the next few weeks, months, or even the next quarter, they will help to establish a direction for your company.
Your primary goals enable you and your team to see the big picture, and understand what you’d like to achieve over time. These goals can include everything from selling more products, to attracting new leads, to expanding your business. Although these types of goals are typically somewhat vague, that’s okay. Primary goals are not necessarily meant to provide you with a strategy. Instead, they help you identify where you’d like your business to be headed.
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Once you have your primary goals established, your business plan will be easier to create. After figuring out which factors will help you achieve success, you can create the secondary goals that will help you get there. These secondary goals are what you will use to shape your budget.
Create a Pathway with Secondary Goals
After you’ve established your primary goals, you’ll want to break them down into more manageable, ‘actionable’ pieces. These smaller targets will become your secondary goals, which in turn will help you achieve the larger business goals you created earlier. Each secondary goal you establish should bring you closer to reaching one or more of your primary goals.
Secondary goals should act like stepping stones, bringing you closer and closer to achieving your primary goals. This means they should work towards the same aim. For example, if one of your primary goals is to attract new leads, you would want to establish a secondary goal to reach a specific number of leads by a predetermined date.
Therefore, to create your secondary goals you’ll need to first consider your primary goals, one by one. Start by breaking the first goal in half, then in half again. Continue to break down that goal until you’ve set short-term expectations you believe your team can realistically achieve in the near future. Then add in some details, such as the date you’d like to achieve the goal by and the metrics you’re going to track (so you’ll know when you’ve arrived).
After you achieve a secondary goal, create another to replace it. Your secondary goals should be progressive, meaning that each new one should build from the last. However, they should always keep the primary goal in mind. If you find that a secondary goal isn’t moving you closer to achieving one of your larger targets, feel free to make any shifts or changes you feel are necessary to steer you back on track.
Use Secondary Goals to Create Your Budget
At this point, you should already know what you’d like to accomplish in both the short and the long term. You should also have an idea of how much money you and your company can realistically afford to spend on promoting your business. The next step is to bring these two ideas together to create your marketing budget.
To do this, you’ll want to consider what kind of digital marketing strategies you can implement to achieve your short-term objectives. However, you need to choose your methods based on the overall budget you’re willing to spend. While certain expensive strategies might enable you to reach your goals more efficiently, they aren’t worth your time if it would mean bankrupting your company.
For example, if you have a primary goal to attract new social media followers, you might have established a secondary goal to increase your Twitter followers by 100 new users during the next month. You could easily accomplish this by paying an influencer to post a link to your company’s Twitter account, but this kind of promotion technique can be extremely expensive. It would be more cost-efficient for your brand to sponsor some posts on Twitter instead, such as this promoted Tweet from Citi:
On the other hand, you also need to be realistic about the returns you will likely see for certain investments. If you hope to increase your visibility dramatically, you will need to be prepared to pay for it. While digital marketing can help you attract new customers for cheap (or even for free), it is difficult to grow a successful business based completely on organic methods.
Therefore, you need to consider what strategies will help you achieve your goals most efficiently, while still remaining within your budget. Do some research to determine how much different strategies are likely to cost you, and to better understand what returns you can anticipate for each potential investment. Then, compare your promotion opportunities to see which brings you closest to your goals for the least amount of money.
No matter what strategies you choose to implement, you’ll want to closely monitor your results to ensure that you’re staying on the right track. If you find that a method you’ve chosen isn’t bringing you in line with one of your short-term goals, try a different approach until you’re making better progress. Don’t waste your time or money following through on a strategy that doesn’t help you achieve your plans.
Many companies begin creating their budgets before carefully considering what they’d like to achieve. If you don’t have a consistent game plan in place, you’re likely to lose sight of the direction you want your business to move in. Using your goals to create your budget can ensure you stay on track, and help you move closer to where you’d like your business to be.
Let’s recap how you can use your goals to create an appropriate marketing budget:
- Establish your primary goals, to understand the direction you want to move your company in.
- Create secondary goals that will enable you to achieve your primary goals, step by step.
- Discover affordable and realistic marketing techniques that will bring you closer to achieving your goals.
How do you think goal setting will help you set a better budget? Let me know in the comments section below!
Solomon Thimothy is the Co-founder of Clickx, a Chicago-based white label digital marketing platform. He has been in the agency space for over a decade and has helped 100s of entrepreneurs build 7 and 8 figure agencies. He helps agency owners on a 1:1 basis to scale sales and fulfillment. Follow him on twitter @sthimothy