Planning the Budget? Avoid These 5 Budgeting Mistakes
As we enter the final few weeks of the year we’re hearing more and more clients talk about planning budgets – they’re either late in preparing them for January or early starters for April.
We thought we’d provide a bit of insight as to how to avoid the potential budget ‘banana skin’ to make sure you don’t slip up.
1 – TWEAKING LAST YEARS BUDGET
Everyone’s busy these days. Which means often the budget is ‘just another form filling exercise’ that can be left to the last minute.
The temptation is to take last year’s budget and tweak it. Spending the budget in the same pots as last year simply can’t be done.
Falling into this trap will ultimately see you fall short, financially and strategically, against the business and marketing objectives.
Make sure you focus on the new set of objectives and focus your investments where it makes most sense this year.
2 – PLEASING THE FINANCE TEAM
An old boss of mine used to say ‘Marketing plays the game. Finance just keeps the score’. I’m pretty sure that led to a less than harmonious relationship between the two teams.
Clearly you need to work together to ensure that the marketing budget works within the overall financial plan. But, the marketing plan doesn’t necessarily correlate to the overall financial plan
So often we see marketing teams trying to work within a framework set out by the finance department, failing to recognise that this ultimately ends in mistakes being made and credibility lost.
Avoid this issue by building detail into the financial plan but keeping it separate from your marketing budget.
3 – IT’S A TEAM EFFORT
We’ve lost count of how often we see one person take total responsibility for pulling together the budget.
Whilst a very noble gesture, the likelihood of delivering an accurate plan is slim, to say the least, especially when multiple people will undoubtedly own different sections of the budget.
Everyone who spends anything from the marketing budget needs to be involved – one person cannot own the entire budget; the responsibility must be shared with all stakeholders taking ownership for their sections.
Doing this will create buy-in but also give you a better chance of making sure the budget accurate.
4 – MARKETING IS AN INVESTMENT NOT A COST
Proving ROI is critical to illustrating the value of marketing’s contribution to the business. The pressure is constantly on, everyone in the business has access to vast amounts of data.
Often, it’s a time-consuming and manual process. The key is to make sure that you have access to the right information and that it’s interpreted it in the right way.
The tools are already out there, employ the right technology to help you connect the dots and produce accurate and up-to-date analysis of your marketing programs.
5 – ADAPT AND ADOPT
Let’s face it, your marketing plan will never be perfect. Accept that and build in a level of agility to the marketing plan.
It’s far better to adapt your plan based on what is happening rather than find out at the end of the year that you’ve missed your targets.
Remain open to change, track your spending, recognise the positives as well as the negatives, adopt new thinking, reallocate budget to the areas that work and stop investing in the areas that aren’t.
At Vault MCM we help you build your marketing plan and budgets, by focusing in on the key challenges faced by your business, rather than individual disciplines.
Not only does this make more commercial sense, it also makes the whole planning process simpler, more accurate and ensures that, throughout the program, we can ultimately measure performance in the right areas.
If you’d like more information about our planning process please feel free to get in touch.