Accounting metrics needed to implement a marketing strategy and budget

Nicole Newman of Newman Networks 10/24/2014

Accounting Metrics for Marketing Strategy and Budget Agenda

• Speaker Bio• Basic Accounting Reports

• Statement of Cash Flows• Profit/Loss Statement• Balance Sheet

• Marketing Basics• Marketing/Accounting Relationship• Marketing Budget• Cost Effective Marketing Techniques• Metrics Needed

• Goals• Operating Costs• Financing Plan

• Next Steps• Resources

Speaker Biography

• Graduate of Temple University• MBA from University of Maryland• Native Washingtonian• President/CEO of Newman

Networks for the past 8 years• Outstanding Leadership Awardee

in addition to Creative Marketing• Author of 4 books – 2 non-fiction,

2 business books• Co-founder of Calling All Female

Entrepreneurs (CAFÉ)

Basic Accounting Reports

• Statement of Cash Flows - is a financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities. Also, The cash flow statement is a statement (report) of flows (both in and out of the business) of cash.

• Profit/Loss Statement - A financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time - usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. The P&L statement is also known as a "statement of profit and loss", an "income statement" or an "income and expense statement".

• Balance Sheet - A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These 3 balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity

Statement of Cash Flows Example

Profit & Loss Statement Example

Balance Sheet Example

What is marketing?

• Marketing is communication• Presale (packaging)• Sale/Transaction (accounting)• Post-sale (customer service)

• Marketing is not sales

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” ~ Peter F. Drucker

Marketing is not about who can talk faster, or close better. It is a deep psychological understanding of customer

needs

Marketing/ Accounting Relationship

• Gross Revenue Goals• Break Even Goals• Market Share Goals• Budget• All the above factors determine the amount of money needed for

marketing• Marketing comes before sales• Marketing budget determines sales, sales determine financing and

financing strategy determines marketing budget and the cycle of business continues

Marketing Budget

• Marketing budget is a %age of Gross Revenue• Gross Revenue should be higher than Break-Even amount• Break even amount must be able to pay all expenses in the budget

(spending plan)• Marketing budget should be enough for the implementation of

marketing strategy• Marketing strategy is a combination of money and time (time is

money)

Cost Effective Marketing Techniques

BasicProfessional Email AddressLogoWebsite with at least three testimonialsSocial Media presence (Linkedin, About.me, Instagram, Twitter, Facebook)Accounting System

AdvancedEmail NewsletterReferral Links on other websiteNetworking EventsPostcards/FlyersCustomer Relationship Management (CRM) System

Metrics Needed

Not All Marketing is Good Marketing• Measure the ROI• What were the expectations?• Were the expectations realistic?• Were the outcomes measurable?

• Measure the time commitment• Can the job be outsourced?• Who is the best person for the job?

• Does this marketing goal need outside financing? (i.e. it takes money to make money….)

Next Steps from WORC

Next Steps from Newman Networks

Upcoming Events from Newman Networkshttp://newmannetworks.eventbrite.comhttp://www.newman-network.com

Calling All Female Entrepreneurs (C.A.F.E.)https://www.facebook.com/groups/phillycafe/ (350+ members)http://www.phillycafe.org

Next webinar:How to work your network, Monday November 3rd at 7pm

Resources

1. http://www.investopedia.com/terms/p/plstatement.asp2. http://

www.accounting-basics-for-students.com/cash-flow-statement-example.html

3. http://www.referenceforbusiness.com/business-plans/Business-Plans-Volume-05/Fire-Equipment-Retailer-Business-Plan.html

4. http://www.investopedia.com/articles/04/031004.asp5. http://www.forbes.com/sites/sap/2012/08/09/what-is-marketing/