How long did it take you to plan your wedding? Did you hire a professional wedding planner? Did you use the same level of detail you used to plan your wedding to develop your small business' brand? If not…why not?
Compare the time and dollars you spent on your wedding to the dollar amount you spent on your brand. Oh, got scared, did you! Do you think it's odd that most weddings cost more than what most are willing to pay to develop the foundation of their small business? Especially considering most small business owners expect to support their family over the years?
Q – What's the average dollar amount spent on todays wedding?
A – Did you guess $30,000?
Q – How much have you spent on brand development for your small business?
A – The average small business (annual revenue less than $500k) spends less than 2% of their annual revenue on marketing. And, branding is just a small portion of the marketing budget, in most cases.
For a $500k business that’s barely $10,000 a year. Which is not even close to enough to build brand awareness and generate sales. And, that dollar amount, typically, does not include “start-up” costs. Start-up costs are usually where a small business should include a higher branding budget, as that’s the time where your company will spend a significant amount of money on your name, developing your logo, building your website and other marketing materials.
Once you are an established company, your marketing budget, depending on business goals, should be more in the 6-10% of annual revenue range. That’d be closer to a marketing budget line item of $30,000 to $60,000. And, within that budget is where larger companies spend a percentage on their branding and/or rebranding elements. Ahhh, now we’re getting close to the cost of the average wedding, right!
According to a recent survey conducted on Chief Marketing Officers (CMO), they planned to spend 7.5% of their marketing budget on brand building in 2013. Based on the figure above, that would equate to a budget of $2,250 to $4,500 alone, just for branding. While not exactly apples to apples, you get the idea. Keep in mind that dollar amount does not include the amount required to create brand awareness and sales, through advertising.
Sure, you might be saying, I don’t make $500,000 a year in annual revenue. Easy enough…take your annual revenue goals and determine your marketing budget using the 6-10% figure. Use the higher end, if your business goals are quite aggressive (significantly higher than previous year) or if your business’ vision or direction has changed. Therefore, if your annual revenue goals are approximately $200,000, your marketing budget should be $12,000 to $20,000 (6-10%) a year. Taking that one step further, for established brands CMOs had a branding budget around $900 to $1,500. By established brands, I mean those who are past the start-up phase and have already developed their initial branding. Developing a new brand requires a significant contribution beyond the $1,500 indicated here.
Let's think about this for a minute. Your brand is your promise and commitment to your customers. Most folks do not plan their own wedding, so why would you tackle something as important as brand development on your own. In my experience, many start-ups or small business owners balk at the cost to develop a brand…their small business’ foundation. I assert that’s a bad plan, and one most regret down the road.
But, there is one thing branding and marriages have in common…they require the right partner. In the case of branding, a professional is recommended to develop the right branding that speaks to your business, the customer and your vision. It can be very difficult for business owners to see their own business from the outside in. Small business owners often become too consumed with their brand intentions, they can't see the forest for the trees, per se.
So, at the very least retain the services of an experienced professional brander to guide you through the process, or better yet, attend the No Moss Brands “Creating a Memorable Brand” affordable workshop coming up in Phoenix in Q1 and Q2 of 2015. I’ll guide you step-by-step through the process of developing or retrofitting your brand to meet your current vision.
Learn more about this revolutionary 3-day workshop, Creating a Memorable Brand, series designed to set your brand and small business on the direct path to success!