Building the small firm budget: creating a blueprint for success.

• Author: Richter, Stephanie

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"So how much do we have left in the marketing budget?"

If your firm is anything like mine, this question has been posed to you at least 20 times this year. The truth is, most marketing budgets are unpredictable and hard to pin down. With new opportunities continually presenting themselves and business development strategies evolving, budget building is a blend of science and art.

The Science

Where do you start? If you're creating a marketing budget from scratch, divide your department's functions. I suggest using Ezra Crawford's excellent columns of marketing approach outlined in his article in this issue of Strategies.

You will then need to look at any historical financial data you can get your hands on. If you are new to the firm, study figures from the previous year, as well as data from the past five years, to uncover any trends. This will also uncover any unknown events, sponsorships or other marketing activities that will need to be planned for.

Many marketers will end their budget planning there and just base a new budget off of historical data. This is a mistake, especially in a small firm. Are the firm's partners collectively planning new business development activities in the coming year? Are attorneys individually planning on ramping up their business development efforts in the coming year? Will the firm concentrate more on certain practice areas rather than others? All of these questions will impact the budget, and asking the right questions will prepare you and the firm for what to expect the following year.

The Art

After gathering the historical data, it is imperative that you have a discussion with your supervisor, or someone who is attuned to what the firm's key decision makers have in store for the future in marketing and business development. Whether it is a long-term plan that will take years to come to fruition or short-term goals that are expected to be hit in six months, this information should be the backbone of the budget.

Once you get a set of goals for the coming year, determine what expenditures will be required of the marketing department in order to meet them. Furthermore, try to tie existing budget items to those goals, if possible.

Perhaps your attorneys are planning on ramping up their individual marketing efforts in the coming year. One could be planning on attending more seminars, while another may want to present a new CLE, and your managing partner may be looking to increase the...