Q4 Budget Planning and Allocation

Robert Rodrigues
By Robert Rodrigues

Intro to Q4 Planning

The year is officially ¾ done and now you get a lot better visibility into how the year is shaping up. The key thing you will want to do right now is to truly reconcile the first three quarters of your financials to date. This will give you a great benchmark against your goals and allow you to see how you are trending vs what your projections or goals were. Below are a couple tips and tricks:

1) Create a list of all your big goals: revenue, leads, sales, customer goals, KPIs

Step one is creating a list of your big business goals and looking at what you had projected for the first three quarters and what your actuals were. From there, take this trend and look at where you’re at for Q4: what is your marketing budget, what are your goals, how are you pacing towards those goals, and start to look at those business metrics.

Your next step should be to see how you’re pacing against these goals. The issue is that a lot of times businesses don’t reevaluate or make changes to these goals throughout the year when most should. For example, let’s say your goal was to do $100 million this year, which would put you at $25 million each quarter (If you amortize it out evenly. Some business, do a majority of their revenue in Q4 so plan accordingly). For this example, if after the first three quarters you only do $40 million total, you need to reassess this goal because you are underpacing and may want to consider resetting those goals.

On the opposite end of the spectrum, if you’re already overpacing your goal don’t be afraid to change and set new, bigger goals. This should be what you strive for.

The same thing applies with your business budget. If you are way under budget for the year, the holidays and Q4 is when you should ramp up that budget if you are in the right vertical and the right brand, like an ecommerce brand over the holidays.

If you are over budget, ask yourself, what needs to get cut that doesn’t have the biggest impact on revenue? Make sure you are spending wisely on the highest impact verticals. If you don’t have a huge budget, PR could be a great outlet to get your product on a holiday gift guide and we have a great playbook for that. This would be a better play than pumping a ton of money in adspend, which is super competitive during the holidays when most brands are competing for the same ad placements.

2) Look at where your budget is going, and see if it should be allocated elsewhere for holidays

Holiday budget planning is a key component of Q4. This is usually the time when a big portion of your annual budget is allocated towards marketing.

With the influx of media buying over the holidays, sometimes the highest and best use of your marketing dollars isn’t best used on Facebook ads, or Google Adwords or other media buying opportunities, but instead it’s better used in other marketing services.

As an example, a real estate client who typically spends a large chunk in ad networks throughout the year doesn’t need to use that same amount of money because so many consumer brands are spending a ton in the ad networks for ecommerce products. Instead, they shift their budget to other services like ramping up on content, email, and PR where there isn’t as much competition as the ad networks.

3) Ensure your team is prepared for the holidays

This is something you may think you have a great handle on until it’s the 11th hour and something goes wrong or needs extra support over the holidays. You need to have a clear plan in place and direction for all team members, departments and roles.

The key here is redundancy. If you are an ecomm brand, Black Friday and Cyber Monday should be all hands on deck. Ask yourself, do you need to outsource anything? Are your people going out of town? Take this into consideration and establish that redundancy and plan now.

4) Planning versus execution

The goal: plan your work and work your plan. Looking at budgets and now that you have all your projections, ask yourself are those are realistic? If not, adjust. If yes, take this plan and execute on it. You have the budget, the people, and the plan, now it’s now abouaction.

If you’re working with an agency they should know ALL moving parts for the holidays, even if it’s not a channel they are touching. For example, if you are doing PR in house and not with the agency, the agency should know what your plan is. Internal and external vendors like agencies and freelancers should know everything that’s going on because whether you think it or not, it’s often correlated and a domino effect.

Another example of this is rewards and discounts. Make sure all channels and parties are aware of these deals and the key dates and deadlines. This should all be planned ahead of time.

5) Don’t forget that Q4 is the most important time to plan for 2019

You can use how you paced throughout this year to set realistic goals for the following year. Here are some key tips for 2019 planning:

  • Collaboration and transparency: get as many people’s input and insight into this. No one knows things better than the people on the front lines. It’s critical that everyone be involved and in turn bought in so it’s a co-authored plan. This means everyone feels that they understand the goals and they are rowing in the same direction.
  • Set realistic goals: make sure you are not grossly over forecasting. These should be SMART goals i.e. specific, measurable, attainable, realistic, and time bound.
  • Forecast your key objectives for your business outcomes.
  • Ownership: assign people to own your key objectives so everything is being run to the ground.
  • Set timelines so that people understand what needs to get done and when.
  • Be able to articulate it: you need to have a written plan and one that is easy to digest with clear objectives that are easy to articulate.

Closing

Now that Q4 has begun and 2019 is in the close future, enjoy the holidays and reap the benefits of all the hard work and planning you’ve done!

Don’t forget… Plan your work and work your plan!

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Rob is one of the Co-Founders and the COO at Power DIgital. His passion lies in finance, operations, entrepreneurship and overall business in general.