| What Is One of the Biggest Challenges for Small Business Owners? Limited budgets are one of the major challenges for small business owners. They discourage growth and lead to the failures of SMEs. Business founders can overcome this hurdle through an effective marketing budget. |
Your budget is tight. You need every dollar to work hard, so marketing investment feels like a risk.
This article shows you how to expand your digital marketing budget for your small business.
It helps you get a strong return on your investment.
GroXcelent enables small businesses to employ strategies that deliver tangible results even with limited budgets. More on this.
The Budget Hurdle: Why Do SMEs Struggle With Marketing Budgets?
TL;DR: Many SMEs often spend too little on marketing. They lack a clear strategy, leading to wasted money and ineffective campaigns.
- 54% of business owners in the UK say limited budgets are a major obstacle (kkbreview).
- 29% of SMEs run out of cash in the United States (CB Insights).
- 15% of small businesses face obstacles in accessing funding in South Africa (FinScope MSME South Africa 2024).
A shortage of capital for early-stage entrepreneurs is a common setback globally. As a result, you fail to fund your marketing activities adequately.
Also, underinvestment means your campaigns lack impact and reach.
You struggle to compete with bigger businesses. Cbinsights further reports that 19% of SMEs face stiff competition from large, established brands.
Your growth stagnates, leading to poor marketing.
Limited budgets harm small business marketing.
The “Value for Money” Imperative: What Should You Prioritize When Spending?
TL;DR: Focus your budget on high-impact activities. Prioritize long-term growth over short-term vanity.
Scarce financial resources are a reality for your small business. However, you can overcome these challenges by understanding how you allocate your marketing budget.
Consider these 3 factors below:
1. High-impact: I have worked with tens of small businesses in digital marketing for 6+ years. And I view these marketing services as having high impact and high value:
- SEO/GEO (Generative Engine Optimization)
- Content marketing (video, text, audio, or visual: images & infographics)
- Email marketing
- Social media strategy
- Digital PR
- Copywriting
They build long-term assets and provide a high return on investment. You can establish your digital footprint on a low budget without ads.
What’s more, your website can continue to attract traffic and increase conversions long after you have created the content.
As an example, current SEO numbers say 49% of businesses believe organic traffic has the best marketing ROI.
The Shoprite Group in South Africa agrees with my views and recommends that start-ups and growing small businesses consider:
| “…low-cost digital marketing techniques, such as organic reach strategies, help maximise their limited budgets.”… advanced social media marketing tactics on platforms like LinkedIn could help them engage broader audiences. Additionally, they could benefit from….. using email marketing and building professional networks through LinkedIn to strengthen brand credibility.” |
2. Medium-Impact: Targeted paid ads on social media or search engines can generate quick leads but require continuous spending.
You should use pay-per-click (PPC) ads when you want to boost sales, launch a new product/service, or encourage more demo sign-ups.
PPC means that Google or Bing charges you when a user takes a specific action, like clicking your ad link. And online data suggests that digital ads offer a 200% return, or $2 for every $1 spent.
3. Low-Impact: Unfocused social media posting, buying unverified email lists, or generic brand promotion. These consume money with little return.
Double down on high-value marketing efforts with long-term growth.
Your Marketing Spend: How Much Should You Budget?
TL;DR: A recommended marketing budget is typically 7-14% of revenue for most businesses. However, this depends on your company’s goals and industry
You should invest more in marketing if your business is new. Here’s why.
- Building brand awareness: You want to reach a wide audience and educate them about your product/service.
- Fighting off competition: You have got competitors to battle with, so an investment in marketing allows you to win more customers.
- Engagement and communication: Investing in marketing lets you engage your new customer base.
- Brand reputation: Effective marketing improves your company’s image. You become a trusted brand, which results in customer loyalty.
As a result, a budget closer to 14% of your annual revenue lays a strong foundation for a start-up marketing plan to take off.
If you work with senior SEO specialists at GroXcelent, you can stretch your budget to hit more goals. We’ve got a plan for every budget.
However, established businesses can invest less. This is because they already have a strong customer base and have built a good name for themselves.
Think of big brand names like Apple, Alibaba, Amazon, and Game in South Africa. So a budget of 7-10% is often enough to sustain their growth.
Marketing is an investment. It’s not an expense but a strategic budget that drives your revenue.
The Partner Advantage: How Can an Agency Maximize Your Marketing Budget?
TL;DR: An agency like GroXcelent provides access to senior expertise and powerful tools for less than an in-house hire. This maximizes every dollar you spend.
You face a choice. Hire a full-time marketing manager. Or work with a dedicated agency.
For example, a full-time marketing manager in South Africa earns 300K rand, or $70K+, per annum in the US. This excludes benefits.
You can save more than 60% on your online marketing budget by collaborating with a partner like GroXcelent.
Here are a few benefits of working with a digital marketing agency:
Cost Efficiency: An agency’s hybrid team offers global expertise at a fraction of the cost of an in-house team. This gives you more value for your money.
For example, GroXcelent’s team is based in South Africa and Asia. This offers you global expertise at a low cost.
Strategic Oversight: An agency ensures every dollar is spent on a strategic, data-driven plan. No money is wasted on ineffective campaigns.
“…a preferred way to connect with customers is via [online] public relations, which includes a content approach that allows SMMEs to connect with various audiences, across various channels (incl. social media), in a more affordable way than traditional advertising.” The Shoprite Group.
FAQs on a Digital Marketing Budget for Small Businesses
| What is budgeting in marketing? A marketing budget is a deliberate plan that shows the amount of money you allocate to your marketing campaigns. It determines your success in marketing since it lets you understand how much you spend on business promotion. |
| What is a good budget for a marketing plan? Your digital marketing budget is a percentage of your revenue. New businesses should spend between 7% and 14% of their income to intensify their marketing activities. Established companies can spend between 7% and 10% to maintain their growth and reach more customers. |
| Why is a marketing budget so important? An online marketing budget enables you to align your campaigns with your company goals. A budget with SMART goals lets you identify your ideal audience, choose the relevant platforms and techniques to reach them, and know which objectives to focus on. |
| How can a small business overcome the challenge of limited budgets? Work with an experienced marketing partner to stretch every dollar of your marketing budget. For example, GroXcelent offers affordable SEO, content, social media, digital PR, email, and paid search strategies. |
Get The Most of Your Budget By Working With a Marketing Partner
You don’t have to struggle with your marketing budget. Prioritize high-value activities.
Follow a clear budgeting rule. Partner with an expert to make every dollar count.
GroXcelent is an SME Growth Agency for ambitious start-ups and growing SMEs.
Want to get a better return on your marketing spend? Book a call today with seasoned marketers for a free consultation.
Our SME growth architects will show you how to maximize your budget for growth.
