Budgeting is something that many people struggle with in their personal lives, so it should come as no surprise that it's often difficult for small business owners as well. There are many different facets of running a business which requires an operating budget. Some, like paying staff and acquiring merchandise or raw materials, are quite obvious, and typically well accounted for. Things become a bit more nebulous, however, once it comes to budgeting for necessities of a less physical nature.

The area that often suffers the most for small businesses is marketing, which traditionally relies heavily on word of mouth. While word of mouth can certainly be a powerful way of getting your name out there, you still need to find a way to get your business in front of somebody to start that word of mouth in the first place. Here are a few steps that can help small business owners establish a marketing budget which makes sense for their size, income, and industry.

Identify Your Target Demographics

If you're running a business, you need to have a good idea of who your customers will be. Do your products attract more women than men? Is it perhaps better aimed at younger, more tech-savvy audiences than older consumers?

You might think your business is more simple than that—a restaurant is mostly interested in serving food, and “hungry people” hardly qualifies as a demographic. Even here, however, there are considerations to make.

Is your restaurant providing a luxury dining experience, serving food made with the finest ingredients? Or are you aiming to offer more casual and quick fare? All these things can drastically affect how your marketing should be designed, where you will see the best results, and how much it will cost. Better still, aiming your marketing at the right demographics may actually save you money, by ensuring a higher return on investment and minimizing advertising venues that won't reach your intended audience effectively.

Establish an Online Presence 

No matter what you're selling, it's essential these days to have some sort of an online presence for your business. At minimum, this keeps anyone from impersonating you and trashing your business's reputation. More importantly, however, is the fact that researching businesses online is an extremely common consumer tactic, and by having accurate and detailed information readily available on the internet, you can guarantee they're getting the right impression.

The exact type of online presence you'll benefit from most will vary depending on your business model. A restaurant, for example, may need a website, equipped with menus and online ordering, while a retailer may want a digital storefront to sell their products to consumers around the globe. Social media can be beneficial to those who may need to communicate quickly with customers about changes to operating hours, menu items, or events, as well as acting as a type of customer service to handle complaints.

What you need for your online presence will also determine your marketing budget, to an extent. While web hosting servers can be quite cheap (many plans are available for under $10 a month), there are some upfront costs when it comes to setting it up, and websites do require regular maintenance to continue functioning securely. While hiring professionals can be an added expense, it's very often worthwhile to ensure your customers have a safe and simple experience with your business.

Crunch the Numbers 

With the above in mind, it's now time to figure out what your budget should look like. Demographic data of your target audience informs your choice of advertising medium, which you can use to estimate marketing costs. You'll also know, at this point, what it will cost to build your web platform and its monthly maintenance costs.

Putting these numbers together into your budget will provide some kind of baseline, but there are other things that you may want to account for in your budgets, such as events and promotions. This is where budgeting can get complicated, and education may need to step in. Finance degree programs are specifically designed around managing money efficiently in this way, so hiring or consulting an expert to fill out a budget more thoroughly can be beneficial in the long run.

Of course, you could also earn this education yourself and keep things in your own hands, if you so desire. Holding a degree in an area of business like this can also be advantageous to your business's image and assist in securing loans and funding by proving you have trustworthy expertise. 

Budgeting can be hard, but it doesn't have to be. Marketing is a critical part of your business's success and should be accounted for in its budget at an appropriate level. You can help your marketing budget to go farther with less by targeting the right demographics through the right venues, building and maintaining a presence on the web, and consulting experts with business degrees (or acquire one yourself) should you get in over your head. Handled properly, this marketing budget can help your business soar to heights you might never have dreamed possible.