While large organizations have millions of dollars to spend on ad campaigns, small businesses only have a fraction of that budget but need to reach a similar audience. Developing a social media budget for small business starts with goal planning. How many people do you want to reach, how much revenue do you want to generate, and where do you want to be a year from now? These are some of the questions you will need to answer before developing your social media budget.
Why Do You Need a Budget?
Some websites provide advertising opportunities for $10 or less, tempting you to throw out a few dollars per week without tracking your expenses. However, even small operations need a budget for the following reasons:
- You'll need to track expenses alongside your profits, even if they're small.
- You'll see where your money goes. When you spend $10 advertising on an app like Instagram, you can view analytics to see how many views and clicks $10 paid for.
- Planning ahead keeps you from accidentally spending too much.
Track every dollar you spend on each platform so you can review your campaign at the end of the month. For example, if you're spending 20% of your budget on Facebook ads but have yet to see a lead increase, you can shift your attention to other sites, increase your Facebook budget to reach more people, or try new advertising techniques.
Experiment with other sites, but only spend large amounts once you're confident you'll see returns. Remember that a slow start isn't a failure--it takes time for ads to start circulating.
How Much Should You Budget?
An ideal social media budget for small business should be 5-10% of the expected revenue generated. If you forecast $10,000 in new sales, you should budget $500-1,000 for the ads.
Spreading your budget across different platforms can increase your reach and, potentially, the number of leads or sales you get. If you rely on one channel, you'll reach a limited audience that might still need to buy your services. Instead, spread your ad budget across several channels to increase visibility.
What Should You Include in Your Marketing Budget?
Marketing isn't just about buying for ads--it's about targeting your demographic, managing your image, and tracking your progress.
When developing a social media budget for small business, you will need to include funds to create content for your campaigns. As the old saying goes, content is king! If you want to get results, you need some really good content, so get creative! Here are some of the assets you will need for your campaigns:
- Blog posts
- Web copy
- Social media posts
The cost of creating these assets depends on the professional you hire. Some creators charge per project, while others charge a flat or hourly fee. Overall, you may spend a few thousand dollars on your content.
Fortunately, you can reuse many of these assets. For example, if a photographer takes pictures of your business, you could share photos on your website, social media pages, and Google Maps listing. Similarly, you can repurpose photos, illustrations, and infographics across multiple special media platforms.
While you can find free assets online, such as free stock photos, customized content is more professional and versatile. Many business owners start with free assets and move on to paid content as their operation takes off.
Social Media Ads
Most social media platforms, including Facebook, Twitter, and Instagram, allow paid advertisements. When you buy an ad, your post appears in users' feeds even if they don't follow your account. Adding relevant hashtags and producing witty, engaging content inspires people to follow, comment and share.
Before you join a community, do some research. Each platform reaches a different demographic, and you'll save time if your posts reach your target audience. For example, a brand that targets women aged 18 to 35 might find an audience on TikTok but struggle to gain Pinterest followers.
Also, remember that you'll need different assets for each website. YouTube requires video ads, while Facebook, Instagram, and Pinterest host static images. Avoid YouTube and TikTok if you don't have the resources to produce video content.
Visit the monetization sections to see how much your campaign costs. The platform will give you a cost estimate when you adjust the budget and duration. Only a tiny percentage of impressions lead to clicks, so you might need a multi-week campaign before seeing results.
Google Ads places your site at the top of search engine results. This is a pay-per-click (PPC) program, meaning you pay for each click instead of each view. Google's worldwide success means that you could potentially reach millions of people each day. Like social media campaigns, you can sign up and get a cost estimate before you start advertising.
SEO software can help you refine your strategy. Some tools can generate a list of keywords you can use in your ads. Other software can present your competitors in a single dashboard so you can see all their posts, advertisements, and hashtags. You can then incorporate those strategies into your campaign.
Your in-house team might need writing, video editing, graphic design, project management, email marketing, and social media monitoring software. Some products offer tiered subscriptions for different business sizes. You can start small and gradually expand as you hire more employees.
Many services offer a free version with more data behind a paywall. Start with the free content, then sign up for a subscription if the software helps your business.
People trust their favorite influencers when they recommend products and services. When you collaborate with an influencer, they'll promote your business in exchange for payment, such as cash, gift cards, or free products. Promotion can come in the form of an advertisement or a positive review. You could even give them an exclusive discount code to share with their followers.
Sponsorships offer a similar promotion. You'll pay for the influencer's expenses, such as the cost of producing a YouTube video. In exchange, they'll advertise your company. You can sponsor an influencer once or create an ongoing collaboration.
The price often depends on the influencer's popularity. Profiles with millions of followers might charge hundreds of thousands of dollars, but they're probably out of your reach. Luckily, micro-influencers are more affordable and accessible. They might have ten thousand followers or less, but they have a niche following who's more likely to buy your products than a general audience.
Marketing agencies can help you with various strategies, including launching a new business, increasing your following, and selling more to existing customers. Their services may include search engine optimization (SEO) and web design. Some agencies offer software like social media and reputation management designed for small businesses.
The agency will estimate the cost when you reach out and discuss your needed services. In the meantime, you can browse their free services, such as discovery calls, website audits, newsletters, and educational content.
Social Media Management
Social media management platforms allow you to view and post from every account. You can also schedule posts ahead and view analytics. Typically, this software has a subscription-based model with a possible free version or trial.
The software streamlines the process, but you'll still need an employee to generate ideas, produce content, schedule posts, monitor profiles, interact with customers, and build a community around your brand. A social media manager tackles these responsibilities while you turn to other projects.
Your employee's salary will range from five to six figures, but their expertise could make your follower account climb into the millions. You're not paying someone to post tweets--you're paying for someone who's spent years crafting successful campaigns.
When Will You See the Results?
The final thought to consider when developing a social media budget for small business is that "views" don't mean "clicks." They don't even necessarily mean "interactions." Thousands of people passively view your ad without acting on it as they scroll through their feeds. PPC campaigns provide more interactions, but most people still need to buy something to exit your site.
A high view count with few interactions doesn't mean you're failing. Even huge companies like McDonald's, have low impression-to-lead ratios. How many times each day do you scroll past an advertisement or leave a website after a minute or two? Passive browsing is simply part of the online experience.
Thus, you might not see results for several weeks. If months pass and you still need to get leads, you might need to funnel more money into the campaign or change your target audience. However, slow but steady growth suggests that you're on the right path.
More money leads to more views, but don't assume you have to pay $800 for a Reddit ad to get anywhere. Find the apps that give you the most impressions before launching into big-ticket purchases.
Find Your Starting Point
Visit an online marketing website to find tools that large organizations use but are affordable for small businesses. Most of your marketing aims to drive customers to your online store. If you're just starting out, you'll need professional web design services that keep visitors on your site.