In late 2015 we took to the metaphorical streets to ask smart business owners where they spend their money. How do you create a budget and most importantly what you spend your budget on. People were extremely helpful but one thing became very clear; Marketing and Legal fees had 2 extremes.
Some companies stated they spend over 50% of their entire funding or business budgets on marketing. Others stated the majority of their fees when on lawyers and solicitors.
Although it does depend on what niche and business you own, is there anyway to really know where to spend your budget, or how much you should be spending? This article is going to be our opinion on this.
Marketing VS Legal
So your budget is limited, do you spend most of it on legal fees or active advertising and marketing. I’ll give my opinions and then show you the responses of the other business owners that gave us detailed answers.
I would spend the majority of my budget BUILDING a marketing or branding division of my own company. This is a little bit “out there” as a response but I think active brand management is needed. Most of the time you hear people offering advertising services, social media marketing, paid marketing campaigns but it all comes down to one thing, which is getting your brand in front of potential customers and clients. If I can do this in a cost effective way, I will have a successful business PERIOD.
That is where the majority of my funds are going. As well as this I’d spend a good proportion on start-up legal advice and contracts. If you have everything set-up well from the start (from a legal point of view) there is no reason to be worried or spend more money at a later time for ongoing legal advice, or even civil or court cases! Which as everyone knows can destroy a business single handedly!
Business Owner 1 – Anonymous
I believe that if you want to grow your business as fast as possible then marketing is the only thing you need. You don’t even need to worry about everything else. The issue? This is reckless and not a long term business strategy. Ever heard of the guy who never consulted a lawyer but made a billion dollar business? No me neither!
Personally I would spend at least 5-10% of my budget on constant legal advice, things like trademark infringement always go missed, but if you have a good solicitor firm actively looking for these things, you will get your money back and more through either settlements, legal action or sales that should have been yours in the first place!
Business Owner 2 – Dan from Garage Shelving
We own what’s generally referred to as a business in a boring but needed industry. One where repeat business isn’t very common. As if our racking breaks for whatever reason, then why would you come back to the same company? This means we need a big influx of NEW business and customers as frequently as possible. This is where our marketing campaigns become so important. Most people think that you shouldn’t spend too much on advertising or marketing. I say you can’t afford not to!
It’s all down to the return on investment, what’s the point of not spending more money if every £5 spent = £7… You’re losing money by not actually advertising more. Sure your profit might only be equal to the amount you spend but you get more people through the doors and then you allow word of mouth marketing!
That’s all folks!