How Much Money Should You Invest In Your Brand?
How much money should you put down for you branding? 1k, 10k, 70k? It’s a hard to know how much to make because honestly there are options ranging from a few hundred dollars to a few hundred thousands of dollars. I definitely believe that you get what you pay for, but is the only way to make hundreds of thousands of dollars is to invest in a brand that costs that much?
First of all, those brands that are making hundreds of thousands of dollars, had to start somewhere. There was a point in their business where they were had just hit their first 100 dollar sale, or their first client and so on. Everyone starts somewhere, which is why a startup shouldn’t have the same mentality as an experienced and long living business.
Secondly, let’s define what a startup is. A startup is someone that is within their first 1-3 years of business. But, more defining than the amount of time that a startup has been in business are your answers to these questions:
Are you still perfecting your craft or service, still learning the ropes? Do you know the type of clients/customers you want to serve? Do you know the feeling that you want to give people when they have an interaction with your business? If not, then you, my friend, are a startup.
As a general rule of thumb, each year you want to invest 5% – 15% of your annual revenue back into your marketing. Branding falls into this category because your brand is your most powerful marketing tool. It’s a marketing tool that accumulates strength over time.
How much of that 5% – 15% should you ACTUALLY invest into the ACTUAL brand though? Cause I get it, you have other marketing needs that need to be met as well. Networking, Facebook Ads, Etc. There is no “general rule of thumb” for this one. But, I like to say that one should plan on investing at the bare minimum, 1.5% every single year.
So if you’re making 50,000 a year after biz expenses. Then you should be spending at least $750 this year on your brand. But, you also have to take into account that brand identity, don’t need to be done every single year. At the very most every three years. So times $750 by three and you get $2,250.
With that budget, you should be spending $2,250 on your brand, at the very least. And why I say at the very minimum, is because I believe that when you have a product or a service that you can wholeheartedly stand behind. You should over-invest in your brand whenever possible. Because It will pay you back tenfold.
When Jackson, founder of global beach, a leading digital agency in the UK was interviewed by Forbes Magazine about his wild and sudden success of his business he attributed success to his branding and said this:
“I allocated the time and the funding to get the Victor brand right from the get-go. When I look back, 45 months later, it has paid dividends. If I tried to quantify it, I should have paid six-figures for the brand. I paid far, far less. There’s no way I could have paid that much. I got at least 100 times return on what I actually paid.” – Clive Jackson.
Let’s face it there are lots of things that you could spend your money on in your brand. Photography, copywriting, logo design, full brand identity, website design, brand strategy and so much more. So when you have a limited (or not so limited) what should you be spending your money on first??
Whether you have a 1k budget, 5k budget or 20k budget. You should also first invest in educating yourself, invest in books and understanding the process.
After that though, it gets a little more complicated. So I’ve made a guide of what you should be spending your money on within each budget. You can get that guide HERE.
I also tell you exactly what books I would recommend that you start first reading in the guide so go check it out!
But, let’s’ talk about startups, because remember startups are a little different. Startups are in a totally different stage of their business. You may not have been in business for even a year to know how much of your yearly revenue you should dedicate to marketing and branding. You’re still trying to figure a lot of things out.
Your main goal as a startup is to get sales, to get enough money to finally quit your day job. to fund your dream, to pay a part of your monthly bills. Am I right? So, let’s focus on branding in a way that’s going to get you sales, because I see you hustlers out there just trying to make ends meet.
If you’re still trying to perfect your craft, service and aesthetic. Still, don’t know who your ideal client is… then you SHOULD NOT invest in full-blown professional brand identity. A branding strategist telling you not to invest in brand identity, totally weird I know but hear me out.
Your focus should be on learning as much as you can about branding as possible, and trying to get enough sales so that you can quit your day job and eventually, hopefully, sooner rather than later, invest in full blown brand identity and strategy…. when you’re ready for it.
So instead of hiring a brand professional, learn as much as you can about the branding process, what makes a REAL BRAND. Spend lots of time with your clients and customers so you can find the perfect, ideal one. Take time finding a beautiful “why” behind everything. Spend a lot of time behind the scenes figuring out who you really are as a brand.
But, you still need to look professional in order to get sales, I get it. So instead of investing in hiring a professional to do a custom logo and brand. Get a semi-custom branding package or some business templates… hint hint at what’s to come (click here if you want to get on the waiting list for when these launch in February)
I break down the rest of what you should be spending your money on as a startup to get the most bang for your buck in this guide HERE! So go check it out! And let me know your thoughts. How are you going to be investing in your brand this year?
So ultimately you need to be spending at LEAST 1.5% on your brand every single year, over-invest in your brand whenever possible. But, if you’re a startup, learn as much as you can about branding and your industry until you can confidently and wholeheartedly stand behind your product or service, and you have experience or industry research to back you up.