Marketing and annual budgeting are closely linked.
For businesses, marketing planning and budgeting are closely linked; without an annual budget, a marketing plan rests on uncertain financial ground. As you work through your business plan for the year, allot a portion of the budget for marketing activities and work through a marketing calendar to ensure adequate cash flow for each of your marketing strategies.
Significance
Because the budget for your company's marketing activities is usually part of the annual budget, one cannot exist without the other. By including marketing planning in the annual budget planning, you reduce the risk of not having the funds available for each promotional activity throughout the year.
Considerations
Annual budget planning is rarely an exact science, and many businesses include alternate options in the case that their financial situation is better or worse than anticipated. To account for either possibility in the marketing planning, you can prioritize marketing activities to ensure that the most important efforts will be adequately funded. You might rank promotional strategies by quarter so the budget will cover at least one major initiative during that period.
Time Frame
If possible, it is advisable to create a marketing plan at the same time you are developing an annual budget. As part of marketing planning, create a marketing calendar that covers activities, promotions and events for the entire year; in doing so, you can ensure that the business finances will be able to handle the costs of each campaign. A calendar will also enable you to plan a marketing campaign before a time when sales have historically been low, which can boost profits and improve performance.
Types
When you include marketing planning as part of annual budget talks, it can help you choose the types of events and activities that will be possible. If your budget is low, for example, you may adjust the marketing plan to eliminate costly print campaigns and focus instead on less expensive Internet or email marketing strategies.
Cautions
As you develop an annual budget and a marketing plan, allow some flexibility in both areas. Although you may discover that the annual budget is less fluid, it may be necessary to cut back in other areas to make room for a marketing initiative that will mean a significant boost in sales. Expect the planning process to go through several back-and-forth rounds between the marketing department and the budgeting committee.
