Determining your law firm marketing budget is usually the most difficult part of writing a marketing plan, but it is crucial to the success of that plan since underfunding your marketing program is a sure way to fail.
One of your first inclinations may be to research what other firms comparable to yours are spending. Unfortunately, not a lot of data exists to guide you here. What your budget really needs to be built on is your marketing plan — your goals and the specific measurable tactics you will deploy to meet those goals.
The financial section of your marketing plan should include:
- Your currently available funds (cash in hand for expenses)
- A list of your current monthly sales revenues for every category (individual clients, contingency cases, etc)
- A breakdown of all fixed expenses including: payroll, office rent, equipment, insurance, taxes, etc.
- A 12 month timetable in which you estimate how much revenue you will bring in per client per month (assuming you will not keep every client forever)
- A forecast of new revenues—how many new clients do you anticipate per month and at what rate
- A comprehensive list of all marketing activities and anticipated expense of each one
- A simple profit and loss statement (P&L) in which you subtract your anticipated expenses from your anticipated revenues. It gives you a visual picture of how many new clients you need to run your firm, how much money will be spent in overhead and marketing costs and when you will make a profit. It also allows you to run different scenarios (best case, worst case, average case, minimum revenues, etc), which can help in determining your expenditures.
If you take the time to carefully lay out your financial plan, anticipated expenses, current and anticipated new revenues, these numbers should give you a pretty good idea of how much money you need to properly fund your marketing efforts.
There are six financial numbers every lawyer running and growing a business needs to understand and review every month. Unfortunately, many attorneys don’t have the systems in place to obtain these numbers or they don’t know which numbers are the most critical to their business.
If you don’t know your numbers you cannot build a financially successful law firm! This webinar will provide you with the tools you need to accurately gauge the financial stability and health of your business.
In this information-packed webinar you will discover:
- The 6 key financial numbers you need to track
- How to determine your cash flow position so you can plan for future growth
- Core components of a solid chart of accounts
- The true cost of Accounts Receivables and how to collect more of them
- How to set up and live by a monthly business budget
- What a budget variance report is and why you need one
- The importance of your balance sheet and how to create one