VI. PROPOSED BUDGET

The budget section can get a little tricky. Be sure that your budget is realistic for the business you have selected. Students often want so badly to show their expertise that they propose a long list of ideas that makes their budget totally unrealistic.

 

You also need to be careful that you cover the "hidden" costs.  This might include printing or postage, apps that assist with social media, wages or salary of staff, etc.  

 

The biggest challenge is being able to justify the size of the budget.  You must be able to explain to your judge how you arrived at the size of your budget. 

The most common method of establishing a budget is to base it on a percentage of sales. Marketing is a business expense and must be treated that way.

 

Many companies set their budgets by allocating between 1% and 10% of their revenues to promotion. This assumes a direct relationship between revenue generation and marketing. In many instances, this is not the case.

 

One simple way to set the budget is to add up the costs of all marketing activities planned for next year. The total amount gives you the market budget for next year. In other words, determine what you want to do and find out how much it will cost. That amount becomes your budget.

 

Matching what your competitors are spending is another way of establishing your budget. The thought is that if you want to remain competitive you have spend as much as the competition.

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Here are a couple of aticles that wil help with setting your budget:

Budgeting Methods for Marketing Promotions

How To Set A Promotional Budget

Setting the Total Promotion Budget