And the first to go is the marketing budget

When sales go down, as many industries will see in the next while because of the state of the American economy, the accountants start making their lists of cutbacks and layoffs. This is true in big business as well as rural and small business. And one of the first things to go, in the majority of cases, is the marketing budget.

Accountants see marketing as a cost centre. There is no direct line from marketing to increased revenue in an accountant's mind. It is the sales department that brings in the revenue. So cutting back the marketing budget will save money, right?

Wrong!

If you cut back on your marketing spend, how will your customers learn all the great things about your business? If anything, you should plan to increase your marketing budget to support your sales during times of lean coffers.

I've lost count of the number of times I've had this discussion with accountants and actuaries. Okay, for their sakes, I'll change what I just said (plan to increase your marketing budget) to leave the marketing budget alone - leave it at the same level it's at before your business starts to shrink.

This is where having the right marketing team in place is so very important. Your messages have to be fine-tuned and extremely targeted during the lean times.

I've just had the pleasure of working with a bunch of brand new business owners as they build their business plans. Needless to say when you're first starting your business, times are lean as well.

It was painful for me. They were being told by the class facilitators that a reasonable marketing budget is between two to five per cent of their annual sales projections. Of course, they were also coached that they should decide what they needed to do to market their business and plan an appropriate budget. Not one of them went above the five per cent mark, and most went with two per cent. Needless to say, these percentages were created by accountants.

Brand new businesses should be planning a bigger marketing spend to get the word out and promote strong sales. With a tight, skinflint marketing budget, their business will grow slowly and may not survive the first year.

Economies of course make sense when times are lean, but it's important to look at the big picture. If you cut back your marketing budget, what will support your sales team and deliver your message to your customers?