How do I plan next year's marketing budget?

December is when many companies think about the following year and ask how much to set aside for marketing. The temptation is to copy a percentage they heard, or repeat last year's amount. Neither helps much. A useful budget is born from what the company wants and what it already knows works.

Step 1: review the year that is ending

Before planning, look back. Which enquiries arrived, where did they come from and which became customers? What marketing expenses were there, and which left visible signs? If you do not yet record where enquiries come from, start now: how to tell whether your website brings enquiries explains how.

Step 2: set a simple goal

A clear, short goal, such as "more enquiries for one specific service" or "less dependence on recommendations". Two or three goals at most. A budget without a goal is only a list of expenses.

Step 3: list the expense blocks

• The foundations: website, Google profile, contact details, measurement tools.
• Upkeep: regular content, social media, updates.
• Paid channels: ads, sponsorships, listings.
• Tools and subscriptions (email, diary, contact management).
• People and outside services: photography, video, freelancers, agency.
• A reserve for the unexpected and for opportunities that arise.

Step 4: order by priority

First the foundations, then upkeep, and only then paid channels. Paying to bring people to a confusing website or an unfilled profile is spending badly. Read how to decide how much to invest in ads before setting an amount aside for them.

Step 5: split by quarter

Instead of spending the year at once, divide it into four blocks. This leaves room to adjust. The foundation work, which takes a while to show signs, goes in early; campaigns go near the times when your business sells most.

Step 6: choose who does each thing

Decide what stays inside the company, what goes to freelancers and what goes to an agency. Your own availability counts as a cost: if you will spend two hours a week, record them. The guide agency, freelancer or in-house person helps with this choice.

Step 7: set reviews and cut-off rules

Set a date each quarter to look at the signs and decide: continue, adjust or stop. And write a cut-off rule now: "if a channel brings no signs by the end of the quarter, we reduce it". Deciding this beforehand avoids deciding on emotion in the middle of the year.

Common mistakes

• Copying a percentage from another sector or another company.
• Putting everything into ads and nothing into the foundations.
• Forgetting internal time, which is a real cost.
• Leaving no reserve, and having to cut what is working to pay for what came up.

In Digital Marketing, the year's plan starts by seeing what already exists, before talking about amounts.

A one-year sheet

Create a sheet with the expense blocks in the rows and the four quarters in the columns. In each cell, write what you will do and the planned amount. Add two columns: "goal it serves" and "sign we will watch". If a row serves no goal, question it. If a row has no sign to follow, either find one, or stop treating it as an investment and see it as a cost to justify. Review the sheet each quarter and keep the previous version, so you learn from the differences.

In short

• The budget starts from a goal, not from a percentage heard somewhere.
• Reviewing what worked in the year that is ending is the first step.
• Foundations first, upkeep next, paid channels last.
• Set quarterly reviews and cut-off rules before you start.

Quick questions

What percentage of revenue should I set aside for marketing?

There is none that suits everyone. It depends on the sector, the stage of the company and what you have already done. Start from the goal and from what you know works, and let the percentage be the result, not the starting point.

What if last year has no data?

Start by recording, from now on, where enquiries come from. For the first quarter, plan something small and reversible, and learn from it.

Should I set aside a part for the unexpected?

Yes. An opportunity or an unplanned expense almost always appears. A small reserve avoids cutting what is working.