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What is a Realistic Marketing Budget for Small Businesses?

Too often we see small businesses allocate little to no money on their marketing campaigns with the thought that they’ll be able to get by. Unfortunately, products and services do not sell themselves, so it’s imperative to budget a portion of your revenue to marketing. Otherwise, you’ll have invested a ton of time and money into a fantastic idea that falls by the wayside due to haphazard marketing efforts. It’s hard, as a small business, to hone in on how much money to allocate to marketing and how to spend this portion wisely, but it’s a necessary component to the success of your business.

It’s difficult to decide how much money you should spend on marketing a year. This varies depending upon your goals as a company. How established are you in the marketplace currently? How much and how quickly are you trying to grow? How many products are you trying to market? How competitive is your industry? These are all extremely important questions to consider.

Before deciding upon a marketing budget, organize all your financial information. Determine how much money your business takes in monthly after all expenses are deducted. Then, you can better decide how you want to divvy up disposable income and the percentage you will allocate to marketing based on company goals. In general, businesses allocate around 5-7% of their revenue simply to maintain awareness and visibility. However, if you are new to the marketplace and are trying to get noticed, you might want to spend closer to 10% of your revenues on marketing.

Once you’ve decided how much you are willing to spend on marketing, it gets even a bit trickier. You should then determine how and where you want to spend this money. It’s necessary to have a marketing plan in place to highlight all the costs. Will you allocate the majority to advertising to attract new clients? Will you pour a good portion into social spending or blogging? These are all things to consider. Make sure you leave a little wiggle room for testing as well to see which strategies produce the biggest return on investment.

Hopefully we haven’t overwhelmed you, we’ve simply triggered the wheels to start spinning and you’re eager to start planning! There are a few things to remember when planning your budget:

  • Have a plan and goals already determined before calculating numbers.
  • Make sure your budget is flexible to react to any unexpected highs and lows, seasonality, etc.
  • Set a realistic goal – marketing takes time, so don’t pour all your money into something and expect to see results right then and there.
  • Measure your marketing efforts. Compare past performance to that of your current strategy, look at changes in revenue, etc.


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