What is an SME budget

Clearly define goals and budget

A good marketing campaign is based on clear objectives. The definition of budget, goals and targets must be precise and realistic.

If you want to set up a marketing campaign, you first have to know what goals you want to achieve. Do I want to refer 100 new customers? Should the sales figures increase by CHF 200,000? It is not always possible to describe the goal so precisely: Sometimes it is about polishing up a tarnished image, conquering a new customer segment or launching a new product. The goals are defined in several steps:

  • The special thing about the company. It is important to record the characteristics that led to the founding of the company and that make it unique: How do we stand out from the competition? What can only we do? For a company like Google this would be: "Organize information and make it accessible to everyone."
  • Define a goal with the associated time horizon. For example: Increase in income by 10% by the end of the year.
  • Define targets. This means measurable results, expressed in numbers, which are sought and which help to achieve the goal. For example: Gaining 200 new customers or bringing a new product onto the market in order to generate a ten percent increase in earnings.
  • Strategic planning. This includes the definition of all concrete measures that are to be initiated in order to meet the targets. For example: increasing the presence on social networks in order to be able to address a wider audience. Or: launch of a poster campaign as an accompanying measure for the market launch of a new product.

The more carefully these stages are worked through, the lower the risk of creating an advertising campaign that misses the mark. The creative team can build on this structure and does not get on the wrong track.

This process also helps to uncover unrealistic or overly ambitious expectations and to revise them in good time. Ultimately, a focused message emerges. Because a good advertising campaign focuses on one main message and doesn't try to say everything at once.

The budget

Once the battle plan is in place, a budget is needed. It contains two variables: the time to be invested and the money to be spent. It can be more effective, especially for SMEs, to invest time in convincing customers verbally or by e-mail of the benefits of a product, or to appear at trade shows. A large-scale poster campaign would address customers less specifically.

The financial component of the budget depends on the type of company and the respective environment:

  • A mature company that works in an established market and sets itself moderate goals spends 2% to 5% of its annual turnover on marketing measures.
  • A start-up that is aiming for strong growth or wants to enter a new market invests 7% to 10% of its annual turnover in marketing activities.

The following costs are summarized in this amount:

  • Purchase of advertising space
  • Mailings
  • Establishing or updating a website
  • Design or revise packaging
  • Printing of advertising material (promotional items with the company logo, business cards)
  • Labor costs for the advertising agency or the company's own employees who are tasked with implementing the marketing strategy
  • Any losses incurred as a result of promotions or introductory offers that are used to accompany a product launch or to attract new customers.
  • A 10% margin to cover unforeseen expenses

Source: Small Business Marketing Kit For Dummies, Barbara Findlay Schenck, John Wiley & Sons Inc, 2012.