19 {{ upvoteCount | shortNum }}
19 {{ upvoteCount | shortNum }}

Marketing Budget Estimation for Business Plan

by Elijah Laughinghaus
19 replies
I am a professional photographer looking to monetize my unique knowledge of exotic locations into a photography tour business. I am currently projecting costs for the business plan, and the one area I have no idea how to get started on are the marketing costs. In fact, I consider marketing will be the primary focus of the business and the only possibility for success so I want to get this right. The target market is landscape photographers.

The first year objective will be to make between 72-98 sales. (1 tour per month, 6-8 people per tour). The cost will range from $2000-$6000 per person depending on location. I roughly estimate this so far, has the potential to net between 90-120k the first year after expenses if these sales goals are met (excepting the marketing budget which is not yet determined). The business will scale by hiring additional photographers to lead additional tours at additional locations, but this is the first year objective.

So my question is, what are going to to be the most effective outbound marketing channels I can employ, and how can I estimate those total costs, as well as a per customer acquisition cost estimate?
#budget #business #estimation #marketing #plan
  • Profile picture of the author Elijah Laughinghaus
    I heard this is the best forum online for these kinds of questions, surely there must be plenty of people more than knowledgeable enough to answer this at least somewhat?
    {{ DiscussionBoard.errors[10684836].message }}
  • Profile picture of the author maxsi
    Uuuummm....
    you must do a search and find data on your niche. Sometime can be a good move to ask a coach
    Signature
    From $0 To $360 Within 24 Hours (click here) ******* Get 1K Leads per Day...(use this FREE TRAFFIC)
    {{ DiscussionBoard.errors[10684904].message }}
  • Profile picture of the author DABK
    You might want to move this into the offline marketing forum: lots of people there have been doing what you're talking about for years.

    The question, based on your info, is not possible to answer.

    A good way would be to send mail to people who've done tours before. You might want to talk to a list broker. The cost, hard to determine because you're going to need to know how many pieces you need to send to make 1 sale.

    You can guess.

    You'll have the cost of the sales letter, the cost of envelopes, the cost of postage, the cost of someone actually sticking letters in envelopes and taking to mail box, maybe the cost of the dohickey you stick in the envelope to increase the chances of it being opened.

    Another alternative would be to place an ad in a photographer's tour world kind of publication...

    First thing, before you decide what type of marketing you do, figure out who's your ideal client, what websites he/she visits, what magazines he/she buys, what associations he/she joins, does anyone else market to same?

    Probably the best way would be to find someone who targets the same people and have them send a letter on your behalf to their existing clients.

    Once your business is established, you'll probably be spending 3-5% of gross. But, to start it, you might spend a lot more.

    Me, I can't even begin to imagine, who would be interested in paying that kind of money just to take photos of some grass and tress when you have grass and trees in your back yard.

    But, apparently, there are such people. So, step one: figure out where they exist in large numbers.
    Originally Posted by Elijah Laughinghaus View Post

    I am a professional photographer looking to monetize my unique knowledge of exotic locations into a photography tour business. I am currently projecting costs for the business plan, and the one area I have no idea how to get started on are the marketing costs. In fact, I consider marketing will be the primary focus of the business and the only possibility for success so I want to get this right. The target market is landscape photographers.

    The first year objective will be to make between 72-98 sales. (1 tour per month, 6-8 people per tour). The cost will range from $2000-$6000 per person depending on location. I roughly estimate this so far, has the potential to net between 90-120k the first year after expenses if these sales goals are met (excepting the marketing budget which is not yet determined). The business will scale by hiring additional photographers to lead additional tours at additional locations, but this is the first year objective.

    So my question is, what are going to to be the most effective outbound marketing channels I can employ, and how can I estimate those total costs, as well as a per customer acquisition cost estimate?
    {{ DiscussionBoard.errors[10685032].message }}
    • Profile picture of the author Oziboomer
      Originally Posted by DABK View Post

      Me, I can't even begin to imagine, who would be interested in paying that kind of money just to take photos of some grass and tress when you have grass and trees in your back yard.

      But, apparently, there are such people. So, step one: figure out where they exist in large numbers.
      I have a client who goes on a photography tour once a year.

      The photography is only one part of that "vacation"

      I've travelled the world by looking at their images and presenting them for display.

      They would not consider themselves a "photographer" although they do go on photography tours.

      From what I can gather it is as much about the group that tend to go together each year to locations that are usually pretty hard to get to.

      The locations *she* has visited over the last 6-10 years include. Iceland, Cuba, Madagascar, Easter Island, Peru, Antarctica, Iran, Siberia, Galapagos.

      Their employment is as a top academic professor and I would estimate their age to be now 60.

      They travel with the same group each time.

      I'm sure the marketing costs for the organiser is not particularly high given that that have repeat clients with the desire to go to the next location.

      I would be pretty certain the client arranges their annual leave around the photographic tour.

      They spend at least 10-15K per trip.

      My business always gets 5 images to print and display after the client returns.

      A few other clients and past clients have exhibited similar characteristics....usually working in tertiary education as senior lecturers or in senior administrative positions. Usually 55 plus. Often married with adult kids. Often have multiple investments. Often drives European vehicles or higher end SUVs

      Perhaps you can check out the costs of targeting these types of individuals using a service like what acxiom offers. Audience Solutions, Data and Decision Sciences - Acxiom.

      Maybe you could target people who have recently bought a high end Canon camera and attended some workshop plus fir the criteria I mention above. get a quote from axciom based on that sort of targeting and you can then start to work out costs to target.

      Maybe use some of the market intelligence tools available like "who advertises where" or compete.com https://www.compete.com and check out where the competitors like Trekabout Photography Workshops - Courses, Workshops, Tuition and Tours with Mark Raynerare advertising

      Then you will need to throw some money at it and test the results.

      Best regards,

      Ozi
      Signature
      {{ DiscussionBoard.errors[10685272].message }}
    • Profile picture of the author Elijah Laughinghaus
      Originally Posted by DABK View Post

      First thing, before you decide what type of marketing you do, figure out who's your ideal client, what websites he/she visits, what magazines he/she buys, what associations he/she joins, does anyone else market to same?

      Probably the best way would be to find someone who targets the same people and have them send a letter on your behalf to their existing clients.
      How, exactly, can I figure out who my ideal clients visit and what magazines they buy etc.?

      You're suggesting, I ask one of my competitors, to send a letter on my behalf to their current customers? Why on earth would anyone want to do that?
      {{ DiscussionBoard.errors[10685956].message }}
      • Profile picture of the author DABK
        You do research. You guess. You talk to some. You test.

        No, I'm not suggesting you do anything with competitors. I'm suggesting you partner with owners of non-competing businesses whose clients are people who'd likely buy what you sell.

        If your idea client drives Volvo, you'd approach a Volvo dealership; if they buy Chocolate from the store at the corner of Main and Broadway, you'd partner with the store at the Corner of Broadway and Main.

        Originally Posted by Elijah Laughinghaus View Post

        How, exactly, can I figure out who my ideal clients visit and what magazines they buy etc.?

        You're suggesting, I ask one of my competitors, to send a letter on my behalf to their current customers? Why on earth would anyone want to do that?
        {{ DiscussionBoard.errors[10686020].message }}
  • Profile picture of the author Jason Kanigan
    OP, I think a much better approach would be to figure out how much money you want to make...and then determine your marketing budget from that.

    IE. How much can you afford to spend to get a customer?

    That should help you choose your marketing channels, as well.

    Please start making a distinction between "cost" and "price". "Cost" is your investment in doing the thing--advertising, putting the event on, rentals, etc. "Price" is the revenue amount you sell it for.

    "Cost" goes out from you..."Price" comes in.

    Get clear on your definitions.

    Get clear on at what point you start making a profit. Your marketing cost can be anything up to that point. Right now it's difficult to help you with estimates because we don't know your costs. Equipment? Rental fees? Location bookings? Are airline tickets included or excluded from your offer?

    Look for misterme in the Offline section; he's a pro photographer and very good salesperson.
    Signature
    >> How To Grow Your Online Business [FREE Training Video, No Opt-In, from 10+ Year Vet]

    >> For Agency Founders: The Fast Shortcut To Selling SEO, Leadgen, Webdesign & Other Services
    {{ DiscussionBoard.errors[10686068].message }}
    • Profile picture of the author Elijah Laughinghaus
      Originally Posted by Jason Kanigan View Post

      OP, I think a much better approach would be to figure out how much money you want to make...and then determine your marketing budget from that.

      IE. How much can you afford to spend to get a customer?

      That should help you choose your marketing channels, as well.

      Please start making a distinction between "cost" and "price". "Cost" is your investment in doing the thing--advertising, putting the event on, rentals, etc. "Price" is the revenue amount you sell it for.

      "Cost" goes out from you..."Price" comes in.

      Get clear on your definitions.

      Get clear on at what point you start making a profit. Your marketing cost can be anything up to that point. Right now it's difficult to help you with estimates because we don't know your costs. Equipment? Rental fees? Location bookings? Are airline tickets included or excluded from your offer?

      Look for misterme in the Offline section; he's a pro photographer and very good salesperson.

      I see, thanks very much. Ok, well I can say this, that I will net approximately $1600 per customer. The tours will have a maximum of 8 participants, at a maximum of 12 tours in one year. I believe the marketing budget will need to be much greater the first year due to zero referrals and no brand recognition. Repeat customers and referrals are a huge aspect of success in this market. Due to the seasonal nature of the business, and the fact that I need to go spend time on location doing some scouting, from the day I quit my current job, it will take 6 months before the date of the first tour, with one tour each month thereafter.

      How much do I want to make? Well, let's just say that if I could sell out my first year, I'd be more than willing to give up half of that $1600, knowing I would be doing myself a huge favor for future sales and reducing future marketing expenses. HOWEVER I don't think it's reasonable to expect that I will be able to raise $800/customer in startup capital just for marketing expenses.

      I expect to have a total startup capital around $70,000-$100,000, with total monthly costs (including all my living expenses) running around $4000/month. 6 months with no income potential, that's -$24,000, then into the unknown waters of how many sales can I make. The only unknown right now are the marketing costs.

      So maybe I should rephrase the question.

      1. What do you suppose are going to be the most effective channels for this business?
      2. How much do those channels (generally) cost?
      3. Given the above schedule and budget, what would be the recommended amount to aim at spending?

      Just general answers for now. I'm only trying to make an estimate at the moment.
      {{ DiscussionBoard.errors[10687474].message }}
      • Profile picture of the author Elijah Laughinghaus
        I received an email notification of a reply to this post, by a user "wedmag" and it included the post. However, I don't see that post here in the actual thread.

        He said a lot of useful things, but I had a question about this quote:

        "UMass Business 101: You should spend 8%-12% minimum, of whatever you gross or your projected gross sales will be to 5 million. ".

        I estimate this gross would total around $500,000.

        My total budget, let's call it 75k.

        Costs of running business for 6 months prior to first tour date: 24,000.

        Remaining, 50k.

        So I should spend potentially this entire 50k on advertising? That is 4k a month. This raises my total monthly costs to $8,000. If I did sell out all the tours, this would leave me with a net of $57,600 the first year. I suppose that would be acceptable.

        My two concerns are:

        1. At what RATE should I spend it? Call today day one. My first tour for sale is 6 months from now. How much should I spend each month the first 6 months? Should I just go at a steady pace of 4k a month, or should I punch it harder the first 6 months and softer the following 6?

        2. Spending so high sounds RISKY. This marketing campaign and the channels I choose will be UNTESTED. If the channels I choose to spend on marketing don't yield maximum results, I'll be bankrupt fast. As in, even if I sold 6 seats instead of 8 on each tour I'd be spinning my wheels. It leaves no cushion for gradual success, but demands a high level of success right away. There would be no time for "free" channels such as social media marketing to work their way into affecting the system really, for example, as these channels are inevitably slower to reach effectiveness.
        {{ DiscussionBoard.errors[10687996].message }}
        • Profile picture of the author Oziboomer
          Originally Posted by Elijah Laughinghaus View Post

          I received an email notification of a reply to this post, by a user "wedmag" and it included the post. However, I don't see that post here in the actual thread.

          He said a lot of useful things, but I had a question about this quote:

          "UMass Business 101: You should spend 8%-12% minimum, of whatever you gross or your projected gross sales will be to 5 million. ".

          So I should spend potentially this entire 50k on advertising? That is 4k a month. This raises my total monthly costs to $8,000. If I did sell out all the tours, this would leave me with a net of $57,600 the first year. I suppose that would be acceptable.

          My two concerns are:

          1. At what RATE should I spend it? Call today day one. My first tour for sale is 6 months from now. How much should I spend each month the first 6 months? Should I just go at a steady pace of 4k a month, or should I punch it harder the first 6 months and softer the following 6?

          2. Spending so high sounds RISKY. This marketing campaign and the channels I choose will be UNTESTED. If the channels I choose to spend on marketing don't yield maximum results, I'll be bankrupt fast. As in, even if I sold 6 seats instead of 8 on each tour I'd be spinning my wheels. It leaves no cushion for gradual success, but demands a high level of success right away. There would be no time for "free" channels such as social media marketing to work their way into affecting the system really, for example, as these channels are inevitably slower to reach effectiveness.
          Your concerns are valid.

          There are different percentages business spend on marketing and advertising but to dive in and say spend 8-12% minimum of gross revenue is not good advice.

          If you have tested your marketing, are generating a positive ROI and have the ability to scale then you might consider increasing your expenditure to a level where the returns level out.

          It does depend on the industry and your particular business model.

          In my experience a more realistic expectation might be to aim spend 2 - 3% or less of gross but in the early stages you might spend more but probably no more than 5%.

          If you do expect to spend $4K a month without testing I can save you the money. Just send me $1K a month and save the other 3 and we will both be ahead.

          You need to test a variety of platforms and advertise where your prospects are most likely to be.

          If they are hanging out on photography related forums or photography related Facebook groups or pages then you need to narrow the prospect's movements down to where they are hanging out.

          Once you know where the prospects are visiting then you can target some ads towards generating some leads into your business.

          You might consider a free resource guide where you list the top 10 or top 20 desirable locations to shoot the perfect photograph.

          This becomes your lead magnet and you talk about it in the places where your prospects hang out.

          You build a following of people by posting shots from the various locations but you don't give away the location.

          You encourage people to join your list by giving them the list of the locations where you run photography tours.

          You build out a marketing plan to encourage those prospects who have opted in to your free resource guide to then get them engaged to consider going on a tour.

          You need to consider most prospects will take some time to convert from first knowing about your tours to actually going on one.

          Spend your time building the relationship with the prospects and nurturing them until they can book the tour. Many people who are working need to give several month's notice to their employer that they want to go on a holiday.

          Survey all prospects to work out when the best time for them to tour is.

          Just spending on advertising is not the way to go.

          I would look at how other high end tour operators generate leads.

          Here are a couple of examples in my personal sphere.

          There is a tour that leaves from Cairns (A tropical town in North Australia) every year in late August. It is on a luxury motor cruiser (boat) and goes from Cairns to Darwin and then onto Broome in Western Australia across the top end of Australia.

          It caters to 12 people (6 couples).

          It always arrives in Broome on or just before my wife's birthday.

          My wife has always wanted to go to Broome to watch sunsets over the water and explore the amazing landscapes along the way.

          I've nearly booked that trip several times but there has always been something that has prevented us from making the journey.

          Now...we will make the journey...and the operator knows I am a keen prospect but they are also aware it may be another couple of years before I finally pay and book.

          The other "dream" type tours that operate and have the same appeal for my interests are a company called Nomad Charters.

          They are not a photography tour but a fishing charter business.

          Not your usual fishing charter but one that goes to the most remote and difficult to get to locations. They fly you by helicopter onto motherships or you have to go to places where you get picked up and taken hundreds of nautical miles from land.

          Their marketing is something you should look at.

          Their method of attracting and gathering leads and prospects that eventually convert into clients is what you might like to consider. Nomad Sportfishing

          They have always invited a variety of media to attend and film their adventures.

          I would suggest making some good video content and trying to get some of the lifestyle media companies to feature you.

          Don't go out and spend big money on attracting leads until you have the data to back up the expenditure. It is a rapid way to go broke.

          If you did have 50K to spend then you might want to just spend 10K paying for a group of prospects (who win a competition) to go on a tour. You video the prospects enjoying themselves and then that becomes your marketing material.

          You get testimonials.

          You get real experiences.

          You build out your experience and your referring customer base.

          Market to those people and be prepared to go at it for the long term.

          It could take you 9 -12 months or more to get a decent group together for the first tour and then say another 3 - 6 months for the second. After that it will get easier. If you can get media coverage or generate lots of leads who want to tour then maybe quicker but be prepared for the long haul and expect to budget for the long haul.

          Best regards,

          Ozi
          Signature
          {{ DiscussionBoard.errors[10689702].message }}
  • Profile picture of the author Profit Traveler
    Banned
    I think that is a fantastic niche market to venture into.

    Your Budget will evolve as much as your offer/service does.

    You can also add Stock Photos to the mix and even video marketing.

    You could even create photography projects for the local popular destinations.

    Do you own a Drone? Incredible photos have been taken with them. Another possibility.

    -Art
    {{ DiscussionBoard.errors[10686198].message }}
  • Profile picture of the author Michael Fuentes
    Elijah Laughinghaus,

    To get a general idea regarding your online marketing budget for your niche and product, you can try the following:

    1. Take note of the top ranking websites in Google and Bing for exact match keywords that are most likely keyed in by your target audience when they want to look for something that's directly and laterally relevant to your niche and product. Then:

    Use SpyFu to get a list of the exact match keywords that each of those top ranking sites use for their organic and paid search marketing campaigns. Next:

    Sign up for an advertiser account with the search and display and social networks that those top ranking sites use, which would most likely be Google Adwords, Facebook, Twitter, LinkedIn and Bing among others. Next:

    Set up an advertising campaign just to take note of the suggested CPC (Cost Per Click) / CPM (Cost Per Impression) bids of those search and display and social networks ...

    2. Identify the top affiliate networks that have high performing merchants (your top competitors included), specifically merchants in relevant niches and with products that are directly and laterally related to your product. Next:

    Sign up for an affiliate account in those networks just to take note of the RPC (Revenue Per Click / Call) and RPM (Revenue Per Impression) rates of those merchants ...

    That's it. When you're done, you'd most likely have a general idea on how much your top competitors (merchants and site owners / affiliates in directly relevant niches and with directly relevant products) and best possible partners (merchants and site owners or affiliates in laterally relevant niches and with laterally relevant products) are spending for their online advertising and Internet marketing campaigns; and

    You'd most likely be able to use this data for your comparative analysis, like comparing their CPC bids for those exact match keywords in those search and display and social networks against exact match search volume of those keywords, which can give you a better idea on how much they're actually spending for their search and display and social advertising campaigns, as well as the type of results they most likely get from their online affiliate marketing campaigns, which you could have a better idea of by comparing the RPCs and RPMs of those merchants and affiliates against their product prices and the affiliate commissions that those merchants offer, among other things ...

    Hope this helps ...
    Signature

    Contact Me HERE...

    {{ DiscussionBoard.errors[10686724].message }}
  • Profile picture of the author Gifted Jay
    I believe you are not the first in this kind of business. I will advice you to get in touch with those who are there before you, learn from them and make your wishes count,
    GOOD LUCK
    Signature
    Need PLR Articles? You have it here. 39 PLR Weightloss and Pregnancy Articles for just a fiverr!!
    {{ DiscussionBoard.errors[10688603].message }}
  • Profile picture of the author WedMag
    If your annual estimate gross sales is 500k then take 50k as an ad budget for the first year.

    Then find all of the available advertising and marketing methods, determine where you think you will get your best return and start testing and tracking. Never sign a long term deal no matter how good the rates are until you hit big with one or two. Always beat them down from their published rates.

    Be sure to start a blog and or video blog as your business starts and be sure to send out Internet press releases monthly only $99 and post in as many forums as possible asking for marketing ideas and explaining your business model.

    Always keep some in reserves for opportunities that may arise so you do not go over budget.

    Can you send your URL? Do you have a 'shopping cart' or PayPal link for people to purchase your trips online? Do you have a calendar showng the dates and locations and number of people to create urgency to sign up. . .showing max number accepted per trip.

    Can you show kewl photos from those locations to entice people?
    {{ DiscussionBoard.errors[10688615].message }}
  • Profile picture of the author WedMag
    Use spyfu.com to see what your competition or similar types of businesses are doing. You can learn a lot form this service.
    {{ DiscussionBoard.errors[10688631].message }}
  • Profile picture of the author Jason Kanigan
    Great advice as usual from Ozi. I especially agree with the last paragraph, about it taking longer to figure it out the first time than to start duplicating the idea, having been through it myself so many times.

    You have two sides to your revenue equation: Traffic and Conversion. I know a lot about Conversion but not much about Traffic (I just buy it.) Ozi probably knows a lot more about Traffic.

    Finding out quickly if a lead has participated in something similar to your offer in the past could be a great qualifying indicator.
    Signature
    >> How To Grow Your Online Business [FREE Training Video, No Opt-In, from 10+ Year Vet]

    >> For Agency Founders: The Fast Shortcut To Selling SEO, Leadgen, Webdesign & Other Services
    {{ DiscussionBoard.errors[10689871].message }}
  • Profile picture of the author Elijah Laughinghaus
    Here are a few of my top competitors:

    Daniel Kordan | Photo workshops
    Lofoten Islands Norway | Photo Tours Hiking Travel Guides | 68north.com
    Lofoten Tours

    I don't have a website of my own yet, as I have mentioned, I am in the process of writing the business plan.

    Correct my if I'm wrong, I am not yet familiar with using spyfu, but it looks like to me, none of these websites participates in any advertising at all?

    Please take a look for me and let me know what stands out the most for you, thanks!
    Does it allow to see the total monthly traffic these sites generate? I am not seeing that statistic anywhere maybe I'm just overlooking it.

    Ok so let's reiterate. Gross may be about 500k. Net might be about 100k. You suggest 5% of gross,that's 25k, or 2k per month.

    Specifically, considering the business model, what would be the first channels I should test? If anyone can point me in a specific direction here that would be great, thanks so much, this forum is proving by far the most productive I have found!
    {{ DiscussionBoard.errors[10691512].message }}
  • Profile picture of the author Elijah Laughinghaus
    I suppose that since the original question has been answered now, viz. the marketing budget should be around $2000/month, I ought to make new threads for these new questions. I really appreciate having the wisdom of veterans available, it's really amazing of you guys to help out. I hope I'll hear more from you, thanks so much!
    {{ DiscussionBoard.errors[10693164].message }}

Trending Topics