How much should you be spending on your marketing? Guys, Kim borrowed here at your social voice. I was just jumping out of the gym because I thought it was a really interesting question that we do get a fair bit and a lot of times people think they know the answer but they also don't know the answer as well. So the big question is like how much should you be spending on your marketing, on your advertising, in totality, in 100% confirmed how much should you be spending? Now I'll get to that in just a minute but I also want to talk to you about when should you be spending money there, right? So because a lot of people go well if things are good, I don't have to spend money on marketing or if things are bad, that's when I should be spending more money on marketing, advertising, all these things. And I think be opposite, right? Now I tell you why in just a second but I believe, and look, this is not just myself but I know when I went to university, I started marketing, managing all these things, that's probably the only thing I did take from them. There's number one, how much should you be spending on these things and number two, when should you be doing it? Because most people, and this may not be you but most people will actually start to spend money on things when it goes bad, right? If everything is going well and you're getting referrals, you've got people coming into all the time, everything is working nicely, you're like, I don't need to spend money on advertising or marketing because it's working. And that is generally speaking, the time when things start to go down, right? That's when you want to be focused on that because you do have the resources at that point in time to spend the money. Right, think about it, you do have the money at that point in time to spend the money on marketing and advertising, whereas normally if you're in constraint, if you're in a period of time where cash flow is down, sales are down, you don't have the money to double down on things, you don't have the money to increase to spend on marketing, advertising, all that fun stuff. So when times are tough, when times are hard, that is when you should have already been spending money. Now look, there are ways to reactivate clients, get money coming in at those points in time, however, however, it's much easier. If when times are good, you start to go harder. So I highly recommend, that's the first point. I'm going to cover the second point, I'm just going to head into the office now and I will cover that off, but it's how much should you be spending then, right? How much should you, if you're, if you're, if you're, if you're, things are already going well, how much should be spending, if things are going, you know, if you want to scale things up, how much should you be spending and just to general across the board because a lot of times people ask and they're like, oh, I couldn't spend that. I shouldn't spend this. I can't spend that. And they haven't really thought or mapped out and understood why they need to, if they need to, etc. Right? So I'm going to head into the office now and we'll cover off on the next point and how much you should be spending, right? Stay tuned. Just got to the office guys. So let's pick this back up. How much should we be spending on our marketing now? Universally, universally speaking there is a rule, a hard and fast rule. And this rule is based off of revenue, okay? Based off of revenue. Now, some people will get upset at me for saying that some people say it's incorrect or whatever it might be. That's cool. But the universally accepted rule, all right? Rule is 10% 10% of revenue should be put towards your marketing and your advertising. Okay? Now, I'm not saying that that needs to be your media spend. Okay? I'm not saying that you need to spend 10% of your revenue on Facebook ads, like paying Facebook or Google or radio or TV or whatever that is. But the totality of your marketing efforts should be correlating to around about 10% of revenue. So that includes if you pay someone to do it, if you have an internal person and all these things collectively, should be around 10% of revenue. So a lot of people, you might go, oh wow, okay. That's interesting, but a lot of people might be going, well, I'm not spending any anywhere near that or I'm spending over that. Now yes, there are times where you would spend more than that. So for example, if you're in high growth phases, you might actually be spending you 20%. Now you've got to be careful and make sure that all your margins, et cetera, allow for that to happen because otherwise, better things can happen. But yeah, so if you, like, let's just say that you're making through 500 grand a year, you should be spending at least 50, right? I would say, I'd probably say you're spending a little bit more. Maybe you'd be spending close to 100-ish depending on if you want to grow, if you're stable, then maybe you're spending just that flat 50k. But I think it's very, very important to take into consideration that you should have an allocation. I'm not saying that you need to spend it, I'm not saying that you have to spend it. I'm just saying that you should be allocating towards spending that. Because otherwise, what you'll find is that when the economy contracts, which in Australia has happened a little bit recently, and it's happened in the US, people are saying, people are even around of it, doesn't really matter. But the thing to remember is that if times are good, that's when you should be spending more. If you can push through and allocate even more of your budget towards it, if you're having a good period of growth, then thumbs up, well done, keep pushing. Now I would say for people that are in startup mode, you're kicked off, depending on how you bring clients in at the moment, if you haven't really figured out any strategies offline or anything like that, then I would be saying that you should be spending, yeah, like you should be probably spending maybe a little bit more, maybe 15, 20%. It's just from what I've studied, from what I've learned, from what they teach you at universities and colleges, not saying that everything there is accurate. But I do know that that number seems to be around about right. Like I know for ourself and clients, if they turn over around a million dollars per year, depending about that 100K on marketing, marketing people, strategy and things like that, generally speaking, we'll come in about that. I know that it's very easy for me to spend about a thousand bucks a week on Facebook ads, easily without any other spend. That's not a big amount to someone running out, I add all this other sort of stuff. Very easily for us to spend them, we can spend way more. Now obviously if it's profitable and it is working, you can spend scale and increase as well. However, I do recommend allocating that as part of your budget, because most people don't and like I said, it may work for the moment, but I know businesses where things change and then they don't have the funds, the capital to help push them through the restrictive times. Because times were good, they didn't spend money on advertising and they've got to start up. It's costly and then they're already behind the label and way, way behind the label. So if you're watching this, make sure you have a marketing budget allocation. You put together and you've identified how much you should be spending on your marketing and just allocate. As I'm not saying you have to spend it, start allocating, start putting towards going, okay, cool, if I have to pay someone to do this, how much would it cost me? If I've got to spend money on this ad placement, how much is going to cost me? And start to think about, okay, cool, I'm willing to spend up to that, you know, like I'm willing to allocate up to that area. Sometimes I said it might be more, it might be more because you might have to pay someone to do it for you as well. So it might be a little bit more than that, but you should. You should be seeing a good solid return if you do allocate that amount. As I said, if you are in high growth phases, times are good and you can allocate and spend more, do so because you don't want to be in the constructive circumstances where things go bad, things go tough. And then you've got to sit there and try and figure out how to do it, how to create something from nothing. Can it be done? Yes. We have, in the very first stage, when we started, we had to do that all the time, but it's not fun, right? You must rather have predictable levels of growth, predictable levels of marketing spend to allow you to grow as opposed to trying to figure everything else out. It becomes hard, right? So guys, I wanted to share that with you today. So I encourage you to allocate, set your marketing budget, again, even just by listening to this, as a matter of you choose 10%, choose something, right? Wish you all the best. As always, if you enjoyed this video, please tap the like button. Give me some love. Comment, let me know anything that you thought about this, any questions you have. If you've got questions about your marketing budget, let me know and I'll help you out. And always subscribe so you can see this first before anyone else. Until next time, I am Kim Barrett. You have been Awesome Adios.