A lot of wannabe entrepreneurs think that putting together the initial capital for a proposed business is the hardest part to becoming your own boss. While it’s certainly hard to cobble together enough money to get your business project up and running, it’s much harder to determine exactly how much you need to make this happen. It’s not as if you can just put any figure in your business loan application—every penny should be accounted for and put to good use. You can only work on polishing your marketing plan to perfection when you already have a solid marketing audit on hand.
Failure to properly cost and budget your capital can lead to many irreversible errors later on, so you need to really get things right the first time around. When you have finished your SWOT analysis, you would have a pretty good idea of what it is that you want to accomplish and how you can possibly accomplish these goals. Then you can move on to having enough funds ready to finance your every step.
What’s your marketing budget?
Your marketing budget shows the total projected cost for putting your car wash services out in the market. To put things in perspective, you can consider your marketing objectives as your entire marketing plan in dollars.
This may sound simple in theory, but you can run into any number of problems as you try to craft a realistic marketing budget. This is not just about how much you will pay your professional detailers and your administrative staff, how much your office lease will cost, and how much you need to shell out to buy the necessary cleaning equipment and supplies.
There are a lot of hidden and unexpected costs that will drain your funds if you don’t spot them early on, such as business licensing fees, legal services, travel bills, and advertising and promotion costs, to name a few. The trick is to anticipate each and every potential expense and to put a reasonable price tag on it so that you can plan how to spread your financial resources evenly.
Check your costs regularly
Always remember that your marketing strategies should have a healthy margin that allows you to spend a bit more than you planned while still leaving a good reserve in the bank. It should be flexible enough to answer for sudden costs, such as paying out an employee’s severance package or replacing your water treatment facility.
Moreover, as your business becomes a strong player in the market, you have to adjust your budget to answer for very specific expenses. Are you going to launch a post-winter discount for all your services? You need to jack up the budget for public relations and advertising so that you can get the word out. Do you want to upgrade your cleaning machines so that it matches the performance level of your biggest competitor’s? Then you should invest in more expensive technology to make it happen, and add some re-training costs so that your detailers can learn how to use these new machines properly.
The important thing here is that you have up-to-date and relevant research to back up your costing every step of the way. Regular marketing audit will tell you if certain things in your facility have to be bought, repaired or replaced altogether. At the same time, you will also have fair warning of how much it will take for you to advance your business to the next level.
You might want to work with an accountant on this so that your figures are all correct and you don’t miss out on some expenses that you’ve already identified but don’t know how to calculate. You could have a good amount of working capital to do with as you wished, but if you don’t know how to budget it smartly, you’ll see your investments go down the drain in no time at all.
If you don’t want to work on this car wash business project alone and you’d rather work with a proven business model, check out the DetailXPerts franchise page for more information. We can help you with more than just doing your marketing budget—we can help you realize your dreams of financial freedom and entrepreneurial success.
Enjoyed this post? Sign up for our newsletter to receive more valuable business and franchise info, ideas, and extras!
