Budgeting is oftentimes the first thing tackled in a business plan when in fact it should be the other way round. Budgeting should come after strategic and marketing planning.
People often talk about creating a revision plan in an existing business. They want to make significant changes, remarket their products to customers, and radically transform its structure and operations. But when the process begins, the first question that business owners or CEO’s ask is “what should our budget be?”
Marketing strategy before budgeting
Marketing-focused people often put the budget before the strategy. That won’t work. You need to find the right style of media messaging that generates a response (measured in dollars) which is significantly greater than the amount invested.
When you find those “codebreakers”, you have a winning card and a better comprehension of how to play the game. You can then place more money towards that message, garnering a larger audience and generating higher revenue.
Putting a budget before strategy is crazy because you can’t budget for something when you don’t know what to do. The strategy has to come first in your marketing efforts. Create a strategy on who you want to reach, how to reach them and when.
Take baby steps and don’t do it all at once. Test various things to define your direction and where to budget your dollars.
From out to in
Budgeting should be the last item on your agenda. It conceptualizes your actions and makes sure you can afford what it is you want to do in the future.
Start with analyzing the business environment. Do a market assessment to find out what your customers want, what your competition is doing, and major macro trends affecting your business.
After learning what’s outside, you need to do an internal assessment. With a SWOT analysis, you can identify your strengths and weaknesses, as well as, threats and opportunities outside your company. More importantly, you need to ascertain what you want to do personally and get stakeholders on the same page.