Speaker 1: 0:00

Hey everybody, this is the Marketing with a Twang podcast. I'm your host, ben Blackman, and on this episode we're going to talk about how to budget for your marketing. Here comes episode number two. Alright, alright, alright, it's time for Marketing with a Twang. You're down home no BS online marketing show, so pull up a chair and ease on in with your host, ben Blackman. Okay, welcome everybody to episode number two, and actually I'm excited for this episode because I don't think we talk about this enough and I think that most of the things that I've seen out there over the years, when it comes in terms of marketing, and specifically when it comes in terms of running ads and things like that, is they're very vague.

Speaker 1: 0:50

They don't really give you any defined numbers, and sometimes it has to be vague, like sometimes there's a lot of stuff you just don't know, especially when you first start. So the first thing I want to say about this is you've got to run your business like a business right now. Stop waiting. It's so funny that I was recording this. I actually didn't know I was going to record this today, but I had just gotten done, just writing out a few thoughts that were going on in my head. I titled it Acting Like a Business Owner. The first thing that I put down was talking about scheduling your time, which I do, so I realize this is a show about budget, but it's along the same lines. You'll understand in a minute. And the next thing was put your head down and work, which I think is hugely important. I use a tool called Focusmate, where they kind of match you with people all over the world and you co-work for 25 or 50 minutes together and you just focus on one task and the other person focuses on their task and you check in at the beginning and the end. So I use that a lot and have for several years, or a few years anyway. But the next thing I put down was keep your books, and what I mean by that is that when it comes to your finances and budgeting and everything, it's great to have a bookkeeper I have a bookkeeper, I have an accountant Fine, that's great but it does not alleviate your responsibility from paying close attention to it, okay, and especially when it comes to budgeting for your marketing.

Speaker 1: 2:22

So let's talk just a little bit about what marketing is not. Marketing is not redoing your website. That's not a marketing budget. That's a fun thing, because you would be tough to find how many sales. It would be tough for you to find how many sales came back to your website. That's where it originated. That's what made the difference. Now you could argue that when people were researching you before they purchased, that they didn't like your website for one reason or another. But again, you're not going to be able to quantify that for the most part, and you're not going to be so. If you pay a lot of money to redo your website, you're not going to be able to tell the difference that it actually helped you either. That's, that's the whole thing with that.

Speaker 1: 3:08

Now, I'm all about it looking nice and being functional and all that stuff. Yes, ok, that that should definitely happen, but I don't separate out money just for that purpose in my marketing budget. Rebranding is the same way. I have a client. I love her, love her. Actually, I love all my clients. Frankly, I just do. And I mean she must come up with a new branding scheme and logo every month, few months, you know. I guess she just gets tired of it and that's her thing. You know, that's her thing and that's cool.

Speaker 1: 3:42

So what I'm going to suggest is not worry about that, or at least not use your marketing budget for that. Marketing isn't. It's anything that you can't directly attribute to a sale. That's what it's not right. If you can't tell that you got a, you're getting sales from it. It's not really marketing in my estimation. So this is why you've got to budget for your marketing, because you're going to do one of two things You're going to spend time or you're going to spend money. So you've got to budget it correctly. So the other thing is budgeting now, before you might need it. So if you're not running ads, let's say, and you think that you're going to be at some point, go ahead and start budgeting for it today, not later. You don't want to wait until you need ads or until you're trying to scale or be more consistent with your sales and then start budgeting for it. You want to start today and we're going to talk about that.

Speaker 1: 4:38

So I just want to kind of run through this real quick, and that might be harder to conceptualize right here on the podcast, so I'm going to give you a download. So if you go to marketingwithatwangcom and sign up for the newsletter, I'll make sure you get away to get that check. This is just a little checklist or a little sheet for this. So the simplest way to do it is and I use the Profit First modeling so if you've never read Profit First, please do. It's a game changer. It was for me. I mean, I can't even tell you how much more money I'm able to not only make but keep because of that book, and in fact I usually send it out to my clients, like when they sign up with me as a client. That's one of the things I send to them. But I do do a slight variation. So I call it profit first plus marketing, and so it'll make sense, hopefully in just a second. So if you think about how much money you're bringing in your revenue, that's 100% right. That's the total amount. So it's $10, or whatever the number is, let's just say ten thousand dollars.

Speaker 1: 5:43

What you want to do is allocate, have allocations for other things that you're wanting to do with your money. So the first thing is profit. You want to hold back some money for profit. I'm not talking about paying you, I'm not talking about your salary or whatever. However you're going to do that. I'm talking about pure profit that you can distribute later however you see fit. You can do that quarterly, you can do it monthly, you can do it yearly, whatever you want, but you want to pull out some money for that every time you get paid. So and I reconcile this once a week in my books, like I go through and make sure that I allocate the money once a week. But profit's usually around 5%. Depends on how much your revenue is.

Speaker 1: 6:24

But we're going to kind of keep it easy and you can adjust these numbers up and down a little bit, but it has to have something. It's not going to be zero. So we'll say 5% profit. So basically out of $10,000, that's 500 bucks. Then you want to hold out an amount for taxes, because you're going to pay taxes. We don't want to get on the wrong side of that, we don't want to get behind on that, because you never get caught up. It's just a nightmare and I've been down that road. And so we say 15 percent. Now you know you need to factor other things into that, right where you are, and you know you know whatever state you live in or wherever you live. So you just want to adjust that up or down as necessary, but just say 15%. So that'd be $1,500 out of the 10,000.

Speaker 1: 7:08

The next thing is owner's compensation. So that would be let's just say it's 50%, so you're going to keep 5,000 out of that. So that's how much you're going to pay yourself that month. And then the next number is marketing 10%. Now you know, some people can't do 10%, right, they need to pay themselves more owner's compensation. So they need to do 55% there. And only, do you know, uh, uh, 5% marketing. That's fine, if that's the way it has to work out. That's the way it has to work out, but don't make it zero. Okay, hold back money every month and it'll accumulate over time. If you're not spending it, it'll accumulate.

Speaker 1: 7:46

And then what that does is, if you do it exactly the way I suggested, that leaves 20% left over. So what's that for? That's for everything else, that's for all your operating expenses. So what you don't do when it comes to marketing is you don't pay out all your expenses, including your marketing, and then whatever's left over, you pay yourself. No, that's not running a business, that's letting a business run to you. You've got to allocate this stuff out.

Speaker 1: 8:13

And then if you're like well, 20% is not covering my operating expenses, great, then you're going to have to cut some stuff out, right, I mean, that's all that there is. So you're going to have to really take a hard look at what you're doing and how you can either generate more revenue or cut out expenses. But you're not going to cut out what you're getting paid, what you're paying in taxes, what your profit is and what your marketing is. So it's got to be something other than that, all right. So that's just kind of high, high level budgeting for the business itself, ok, and how you get a marketing budget.

Speaker 1: 8:51

So then it comes to how do you allocate that budget once you have it. So let's just say that now you've, you know you've been doing this for a few months and now you've got five thousand dollars to spend. Before you know it, you know you've got five thousand dollars that you can spend on marketing. Great, that's great. How do you budget it? So it depends on what you're going to do.

Speaker 1: 9:08

If you're going to run ads, then the way that you budget that is based on which ad platform you're going to go with, and it's likely for most people at least, as of this recording, going to be Facebook. That's the most likely one, and mainly because the entry point is easy and you can change fast and there's just a huge amount of information out there on it. So you know you're not going to be fumbling around trying to figure out Rumble ads or somewhere else you know where you know, which is, just you know, probably not going to be a good place. So now you do want to make sure that you're matching it to your market, though, right? So if your market, for some reason, isn't on Facebook and, frankly, everybody is but if you feel like they're not, they truly aren't Then you have to go to a different platform. You're likely not going to start on LinkedIn, not because your market's not there. It's because the barrier to entry is so high. It's hard to make that work unless you have a super high tech product or service and you have enough money to spend on it to get those sales.

Speaker 1: 10:15

So you're going to allocate a portion of this money, this $5,000 or whatever it is, to Facebook, and then you're going to say, okay, now what? What am I going to do with, like what? What's my intention here? Well, maybe your intention is to have a lead magnet. Okay, so you want to have a lead magnet and you want to get people into your funnel, and once they get into your funnel, then maybe you get them to book a call and then once you book a call, you close a sale with them. Great Fine, sounds good.

Speaker 1: 10:43

So the lead magnet you want to kind of clearly articulate I don't know why I said it that way. You want to just put down how much you're willing to pay per lead, and you may not know, you might be like I don't know what I should be paying per lead. Susie's paying a dollar and John's paying $25. I don't know what I should do. And that's really good, like everybody starts there. And when I was talking on episode one about comparing to your neighbors, that's kind of.

Speaker 1: 11:13

My point is that you don't know what other people are doing and it's not really how much people are paying for leads. I used to see that all the time People were just boasting about how low their lead costs are, but they really didn't talk about their sales as much. You know, they're just talking about how many leads they were getting, you know. And then then, if they did talk about leads, they were talking about their warm market, not cold traffic, or you know, there's always something I'm not saying people are trying to deceive people. I just mean that that we don't always get the whole story, and so you have to just be very cautious when you hear stuff like that. So if you don't know, right, if you're just like I, have no idea, then just pull a number out. Let's just say it's $10 a lead Okay, it's an easy number $10 a lead. Okay, 100 leads $1,000. That's what it's going to be.

Speaker 1: 12:00

Know that you're going to spend $1,000 out of that $5,000. Okay, you got 100 leads in. Now what? Well, how many can I get to book a call? Let's just say it's 5% Okay, so you're going to be able to get five to book a call. Great, five book a call. So you just spent $1,000 and you had five book a call. That means it's $200 a call and that's what it costs. Then $200 a call, and that's what it costs. Then you close one, okay, one out of that, and so it costs you $1,000 to get one sale.

Speaker 1: 12:32

Now, if you're selling a low ticket item, that's not going to work, is it? There's just no way you're going to make that work. If you're selling a high ticket item let's just say you're selling a group coaching at $3,000 and you paid $1,000 to get the sale does that work? I don't know. I don't have the answer, because only you know what you have to make Now for most high ticket coaching. That does work, that's good. You're talking about three to one, that works. But if you were thinking, no, no, no, I need to get 10 to one, well, that's not going to work. And, by the way, I might add that that's probably unrealistic to think that, uh, that's usually not the way that works, but it could. I'm not saying it couldn't.

Speaker 1: 13:13

So now you know at least what the budget should be. You know what you should be willing to spend and where you need to focus your time. Cause, because you could do a couple of things there. You could say, okay, well, since it caught, you know I had $10 a lead, but I'd like to double my leads but not spend any more money. Right, so I'll spend another thousand dollars, but I want to double my lead. So I got to cut my lead costs in half. So I have to figure out a way to get the same qualified people to opt in at $5 a lead instead of 10, right. So then you go back to to opt in at $5 a lead instead of 10, right. So then you go back to.

Speaker 1: 13:47

Okay, look at my ad. Is my ad performing right? Am I getting enough clicks right? Am I getting enough eyeballs on it? Am I paying as little as I have to pay in order to get these? Is my landing page converting? Am I getting enough people to opt in on my landing page? And then, am I getting enough people to open up my emails, right? Am I getting enough people to opt in on my landing page? And then, am I getting enough people to open up my emails? Right? And am I getting enough people to click on my calendar? And am I getting enough people? What can I do there to get more people to book, to entice them to book? And so you have to analyze all those parts to see if you can't bring your lead costs down.

Speaker 1: 14:19

Now, the simplest, easiest way is to try to work on your ad. I mean, it just is. It's just the simplest and easiest way, but that may not be the issue. So you have to keep track of all your numbers. But once you do, once you get it dialed in, once you know the number, then you're ready to go.

Speaker 1: 14:36

Okay, that $5,000 that you that you, you know held back is not extra like money. It wasn't grocery money, you, you held it back for this purpose, for testing, for figuring it out. I mean, I just talked to a guy yesterday client been a long time client actually but he had a different business that he didn't work with me on the marketing, he had a it's a long story, but anyway and he contacted me yesterday because he wanted to do a couple of different things and the marketing company he was working with before told him they were like look, if you're getting some sales in, I mean you know, at this number, you've got to figure out if you can double that budget and triple it. I mean you're not going to do it, no, until you do it, which I've been telling him that for a while, but sometimes you just got to hear it multiple times from multiple people and it's the same with you. You're not going to know until you do it.

Speaker 1: 15:27

If you want a guarantee, then you don't need to be in business, or at least not running ads, because that's not going to work. So make sure that you are in the mindset of hey, I've got this money held back, that's what I'm going to spend, that's my marketing budget, and I'm gathering data, I'm trying to figure out what's working and what's not. Okay, go in with that mindset and I'm telling you, you will figure it out. If you go in with I've got to get and I hear this too a lot I've got to get a sale. I've only got. You know, this has to work. No, no, no, that's not going to work, not going to work. So, okay, I think I've said enough on this episode, probably too much actually, and I really I really want you to think about that and think about your budgeting.

Speaker 1: 16:17

All right, thanks for listening to me this week and I'll catch you on the next episode. Are you late getting into the entrepreneur game? I got you covered. Grab my free newsletter at marketingwithatwangcom and each week you'll get bite-sized, no BS marketing strategies, just for you. Get it at marketingwithatwangcom. I'll see you next time.