Sunday, June 21, 2009

SMEs - Step 8 more detail on the marketing plan

When preparing the marketing plan as part of a business plan, a key component is the income budget. The idea is that the marketing department predict sales and therefore need to prepare a sales and cost of sales budget for the financial department. This will include advertising and the rest of the marketing budget as well.

It is critical that the sales budget be done first if a SME, or by the two different departments, marketing and finance, if a larger business.

Too often SMEs make the mistake of juggling sales to meet the overheads. This is a recipe for disaster. The first budget is normally based upon your understanding of the market, and therefore should not be altered to "make ends meet". Go with your gut feel if you are an SME, as quite often it is all you have to go on, as you most likely do not gather and keep marketing data for analysis.

If you find that there are insufficient sales to meet your overheads and desired profits, then review your strategy and see what can be done to change your strategy to improve sales. There must be a change of strategy to increase the sales, not simply a change in sales.

Remember this important part of the process when doing your marketing plan - it could be the difference between success and survival.

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