Define your market spend
An estimated projection of costs required to promote a business’ products or services. A marketing budget will typically include all promotional costs, including marketing communications like website development, advertising and public relations, as well as the costs of employing marketing staff and utilizing office space.
- Percentage of Sales: Some companies set aside a percentage of total sales for all their marketing activities, including advertising, PR, brochures, social media and trade shows.
- Goal Based Budgeting: With a goal-based marketing plan and budget, you have to define your business goals and develop a course of action.
Define inhouse capabilities
Conducting an activity or operation within a company, instead of relying on outsourcing. A firm uses its own employees and time to keep a division or business activity, such as financing or brokering, in-house. A firm may decide to in-house such activities as accounting, payroll or tech support. While it is common for some companies to outsource those divisions, a firm may maintain flexibility in those operations by keeping them in-house.
When dealing with customers, a firm may try to keep the entire transaction in-house. For example, in-house financing is a common practice in certain industries, using the firm’s own resources to extend the customer’s credit. For a brokerage, the firm may try to match a client’s order with another customer, creating an in-house transaction. This allows the firm to benefit from both the buy- and sell-side commissions.
Define outsource costs
A practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally. Outsourcing is an effective cost-saving strategy when used properly. It is sometimes more affordable to purchase a good from companies with comparative advantages than it is to produce the good internally. An example of a manufacturing company outsourcing would be Dell buying some of its computer components from another manufacturer in order to save on production costs. Alternatively, businesses may decide to outsource bookkeeping duties to independent accounting firms, as it may be cheaper than retaining an in-house accountant.