Budgeting your Internet business

If you're currently doing business offline you should have a good idea of what you want to spend on setting up a website and marketing your products online. You may also have an idea of what you're able to spend for every sale you make or lead you generate.

The initial costs of setting up an Internet business and infrastructure will revolve around a website and any back-end systems that are required. Maintaining and developing a site will also require time and money on an ongoing basis, which can often be underestimated. However, the whole process of going online can often provide substantial cost savings for established businesses in the way the company is run.

Next, the marketing budget is likely to be the largest ongoing cost to get the online business established and to drive traffic to the website. Setting marketing budgets is no different to an offline business - forecasting the market size, which media channels to use, the likely response rates and profit margins, which will in turn determine the target costs per lead or acquisition (CPA) and the average cost per sale (CPS).

Internet marketing budgets

The Internet can be highly measurable and any marketing spend can be analysed to demonstrate the levels of ROI (Return on Investment). As long as you have a system in place to establish which source a sale or lead came from, this can be very simply measured. However you should also consider factors such as:

• How much are your competitors spending?
• How much exposure is your business getting in the main online media and search engines compared to your market as a whole?
• Do you want to increase your sales, build your brand or consolidate your profits?

Your marketing costs can be split up into the initial development costs and ongoing spend. The former can include:

• Research and strategy development
• Designing your website
• Optimising your website for search engine visibility.

• Website hosting fees
• Website maintenance and development
• Marketing costs for search engine marketing, such as paid listings and pay-per-click advertising
• Fees for other forms of online advertising, such as banners, affiliate campaigns or email marketing.

Whilst it is not essential to make big initial investments, the most successful businesses continually develop their strategy and plan for development and marketing costs over a long-term period to establish an online brand and to enhance or update the products or services being offered. You should budget for factors such as monitoring your performance, testing and refining both your website and the strategy you use to promote it.

Setting up an online presence will still incur higher initial costs than many forms of offline marketing, so you do have to expect an initial investment period before you start to break-even and reap the rewards. However, sensible forecasting will allow you to control your costs and assess the risks involved.

How The Web Marketing Workshop can help

We have a great deal of experience of providing marketing support through many online media channels and of working with businesses using a number of different strategies. We can therefore help you develop your budget targets and make traffic predictions for individual types of promotions. We can also help you prioritize your spending and source the best value solutions to make every penny of your funds count.

Contact us to find out more about how we can help you develop your online strategy and get more from your online marketing budget. Alternatively, request a FREE 30-minute marketing report on your online business to see what opportunities might be available.