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BEGIN WITH THE END IN MIND

During a recent business consult and strategy meeting, I had a discussion with a client regarding the set up of a marketing budget. During the conversation, the client discussed how they were considering many areas of marketing previously unexplored. The question came: “What are the industry benchmarks for marketing in their line of business and what dollar amount should they spend?”

It would have been easy to provide a number or percentage based on research and benchmarks of like-sized businesses within the same industry. However, for a growing business in unfamiliar territory, one must dig deeper than just numbers and percentages when making a decision like this. The same is true for other aspects of business where large capital expenditures are required, not just marketing.

WHAT’S YOUR END GAME?

Other associated questions could be: Where do you want to be 1 year, 3 years or 5 years down the line?

Knowing these answers beforehand allows a business to reverse engineer their processes. With a clear goal in mind, your business can begin to define your value of success and therefore will have a more precise understanding of the associated costs that will allow your process to sail you into the harbor of your goals. You can also answer the question of how the activity will impact the end goal and if there are alternate resources that might accomplish the task.

TIME FOR APPLICATION

Once you have that done, you can then see how the capital used for your project impacts your vision.

For other business-related insights, be sure to visit Arete CFO.

Since 2011, small businesses around the country have trusted Arete Partners us to help navigate through business financial matters.