Budgeting is ine of the most important things in business. Ensuring you’re getting a high ROI is important for any business, especially for digital marketing agencies. So setting a budget and sticking to it is key.
Narrowing down and setting it can be difficult, but there are a few ways to do this. In this blog, I’ll go over how to set your budget successfully, but most importantly, how to stick to it.
Set Down Your Budgeting Goal
The question “how to make a budget?” is one that is searched far and wide. So, how do you start? The first step is to set down your goals. Define what you want to achieve with your campaign. Once you know this, you can better allocate your budget.
For example, if your goal is to increase brand awareness, you’ll want to focus on strategies like social media marketing and content creation. On the other hand, if your goal is to increase website traffic, you’ll want to focus on SEO and PPC. Once you know your goals, you can start allocating a budget to each one.
Allocate Money To Different Areas
When you have a Digital Marketing Agency, you must have a budget set for SEO, PPC, and social media marketing. These are all important aspects of digital marketing, but they can also be pricey. So you need to make sure you’re allocating enough money to each one.
Determining how much money needs to go into each one can be difficult, but a good rule of thumb to know how much money to set for each one is the following:
Social Media Marketing: 10-20%
Of course, these are just estimates, and the percentages may differ depending on your goals and what’s important to your business. But this should give you a good idea of how to start allocating your budget.
Figure Out Your Agency’s Average Monthly Expenses
When you’re budgeting, you need to figure out how much you spend each month on employee salaries, office rent, and software subscription fees. Once you know your monthly expenses, you can start setting your budget.
A good rule of thumb is to set your budget at 3-5x your monthly expenses. So if your monthly expenses are $10,000, you should have a budget of $30,000-$50,000. This may seem like a lot, but it’s important to have a buffer in case something unexpected arises.
Have Room For Growth And Unexpected Costs
As your business grows, so will your digital marketing needs. So it’s important to have a budget that allows for growth. Additionally, unexpected costs can come up, so it’s important to have room in your budget for these as well.
It’s key to have a budget set for any unexpected costs that may go over budget for the month. Setting aside 10-15% of your monthly budget for these unexpected costs is ideal. So if your monthly budget is $30,000, you should have $3,000-$4,500 set aside for any unexpected costs.
Stick to the budget
Sticking to the budget it’s highly important. You don’t want to overspend and then not have any money left for other important aspects of your business. There are a few ways to stick to your budget successfully.
Set a limit for yourself: Determine how much you’re willing to spend each month, and don’t exceed that amount. This will help you stay on track and not overspend.
Track your spending: Keep track of where you’re spending your money and see where you can cut back. This will help you see where you’re wasting money and where you can save.
Regularly review your budget: This will help you catch any problems early on and adjust as needed. Regular budgeting reviews can keep your spending on track and avoid overspending.
By sticking to your budget, you’ll be able to save money and use it towards other aspects of your business. This will help you grow your business and be successful in the long run.
Adjust As Needed
Not all businesses are the same; what may work for one may not work for yours, so it’s important to consider that when budgeting. If you’re not sticking to your budget, make adjustments as needed.
If you want to learn more about budgeting, finance, and more, be sure to check our book “Digital Agency Hacker.” There we’ll provide 100% tactical advice on how to succesfully run your agency. Don’t hesitate to get a copy today.