Many small-business owners have the following operating basis: work hard during the month, make the money needed to cover bills and survive, get bills paid, pay staff if you have any, and then spend whatever is left on “other stuff”.
Most do not do a proper Financial Plan – hell, most don’t know how to do a Financial Plan!
But my point is that money is never allocated to the FUTURE of that business.
I have often asked clients what their marketing budget is, and the majority don’t have one. Some will print fliers to get some promotion out or or make some branded T-shirts, but they have no clue about what Marketing actually is, first of all, and second, they have no dedicated budget!
It’s the same as it’s winter time, you need electricity and heating, but you have no money for it. Wherever you are in the world, you will know that you cannot work without lights, electricity and heating!
Marketing should be regarded in the same way, because without it you have not created a future for your business.
Other budget items which have to be in the Financial Plan are Reserves – this is putting money away for some future event or situation which may threaten the very existence of your business.
And then there is old bills. Most businesses owe someone money for whatever reason. Each week or at the end of the month, dedicate some amount of money to handling these old bills. Ignoring them and dragging them into the future like dead weight, is not good for creating the future income of your business.
My point however, is two-fold:
- Set aside money for marketing every month, a figure between 10 and 20% of your gross income.
- Learn how to do a proper Financial Plan for your business and do it every month, without deviating from what you decided in that FP.
I hope this helps.