Know Your Budget (And a Special Offer for 2016)

Pie chart on a stock chart with a budget

Are you thinking about contracting someone like a graphic designer, web developer, or content expert for a project? If so, make sure you know your budget upfront before you start calling around and here’s why…

Most business owners are reluctant to share their budget with a prospective contractor. We completely understand this. What entrepreneur wouldn’t be worried that someone is trying to swindle all their hard-earned money! This is why you need to make sure you are very comfortable with this person when you hire them. Make sure you feel comfortable asking questions and holding your ground when you disagree. You are the customer.

Back to the importance of having a budget. Good contractors are not trying to just use all your money. If they know what you can afford upfront, they can be efficient in their planning and find ways to maximize your budget. They will be able to make suggestions for tools, resources, and ways to best utilize their time so you get exactly what you need and not what you think you need.

Piggy Bank
Make sure to save some of that revenue for marketing!

As a business owner, you should have a good idea of what you can spend on marketing. A good rule of thumb is to spend 5% of your revenue on marketing if you want to maintain your current position. If you want to grow, look at spending a little more like 10%. Highly competitive industries – retail, cars, pharmaceuticals – they can spend anywhere form 20% to 50%. It all just depends on company goals.

I you cannot afford to spend 5% of your revenue on marketing, choose the amount you can spend and be upfront with the contractor. If you  are thinking about hiring a marketing consultant or graphic designer, they may suggest you start with the redevelopment of your logo and slowly redesign all of your marketing pieces so that it fits your budget over a longer period of time. Or maybe they work with you on a specific customer retention campaign. Depending on the success of the campaign, you may be able to use some of that revenue to fund your marketing needs.

Let’s look at some examples of why it’s important to have a budget…

Example 1:
Customer calls a graphic designer and says, “I need a new Website and all new marketing materials to match. How much will this cost?” Although the designer asks for more information, the customer just “wants a ballpark.” (We hear this often.) With no knowledge of what the customer is really trying to achieve, something like this could cost up to $10,000, depending on how big and complex the Website is and how many marketing materials there are and if there is a rebranding phase that needs to happen. The designer gets back to the customer and quotes $10,000. Customer never calls the designer back because they only have $2,000 to spend. Everyone loses.

Example 2:
The same customer calls a graphic designer and says “I need a new Website and all new marketing materials to match. How much will this cost?” The designer asks a lot of questions that will lead them to the underlying issue which might be that the customer feels their Website is a bit outdated and hard to use, and they think all their marketing materials need to be changed, just because their Website is changing. The customer tells the contractor he only has $2,000 to spend. This helps the contractor put a plan together in the first round that is affordable and provides options for the customer. Maybe the designer can move the Website to a new platform that is more user-friendly for the customer to update himself and the designer can use much of the existing content, saving the customer some money. Also, the logo and branding is not old, just needs refreshing, and the marketing materials could be completed in phases to make it more cost effective for the customer. In the end, the customer received a plan that was more customized to their real-time needs and budget. Because he received a more accurate proposal, the customer can choose to not move forward with the plan, move forward with the plan as is, or maybe even choose to have some new content created for his Website because this is more affordable than he originally thought.

Proposals are much more useful when they are truly customized, but it is very difficult to prepare something like this when you have no idea how much someone is willing to spend.

SPECIAL OFFER from Prairie Magic Design…

pmd logo colorBecause we’re nearing the end of the year and we know several people are working on their budgets for 2016, we are offering priority placement in our 2016 project schedule for those people who contact us now to start talking about their marketing and branding needs. If we start the dialogue now, we can identify what it is that will help your business grow and you can determine in advance where and how you want to spend that money next year. It’s a great opportunity to help you plan and make sure you get on our VIP customer list at no charge for 2016!