No, not that ‘B’ word. Although this word is often avoided in conversations between business owners and consultants, it is an important and necessary aspect of the discussion. The consultant is often hesitant to mention it and the business owner either thinks they need to avoid it until later in the process OR they are ashamed about what they don’t know.

BUDGET

As a business owner, you constantly have people looking for ways to get a piece of your “pie.” Most have good intentions of providing a product or service to you that is greater than or equal to the amount of money they are asking for, but you still have to be watchful of people that take advantage. Right? Actually, if you are able to establish trust with a consultant, through open and honest conversation, this subject of money should not be difficult. Just as you are probably transparent about the pricing to your customers, you should expect the same out of your marketing consultant.

What should your advertising budget be? Many business consultants advise a flat percentage of sales (between 5% and 10%), but be aware that this is just a general rule of thumb. As explained on Entrepreneur.com, that question can be more complicated. You must consider your margins, rent, market, etc in the equation. I would encourage you to work with your accountant, and decide what you should be setting aside every month to help bring in new customers and repeat business.

Small businesses often rely on “word of mouth” for new customers as they are starting out, but as your business grows, you will experience churn and will need new ways of keeping your company moving in a positive direction. Plus, it is probably becoming more obvious that neighbors are no longer talking just “over the fence”, but most of these conversations take place online. As Forbes explains, a good consultant will help you optimize the power of word-of-mouth and build on your success.

Most growing business owners desire not only more customers but a certain kind of customer. Targeting a specific audience, as we’ve already discussed here, will take expertise and money. Done correctly, though, the return on investment for this type of advertising can provide exactly what your business needs to increase sales and profits. The amount you need to budget not only depends on your company’s finances, but what your competition is doing as well. Loss of market share due to an imbalance in the amount companies spend on marketing is often slow, but deadly. You and your consultant should analyze what other businesses in your area are spending, along with where and how they are advertising, and form a strategy to build or maintain your market share based on this information.

If you are in the processes of building a marketing strategy with a consultant, and feel hesitant to talk about budget, perhaps you need to stop and think about how much you trust the person or company with whom you are working. Either find a way to establish this needed trust, or look for a consultant with whom you can broach this subject without worrying about being taken advantage of.