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Nicole Arzt

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How Much Can You Afford To Spend On Marketing?


How do you determine and allocate your marketing budget? Should you consider these dreaded expenses, or should you perceive them as lucrative investments? Who do you hire to manage the job and how do you determine what money goes where?

There's no doubt that talking about the dollars associated with marketing makes even some of the smartest business owners shrivel in their own confusion and fear. After all, when it comes to drafting the budget, there are so many nuanced variables to consider. What kind of marketing does your business need? Who's going to be responsible for it? And, finally, how much money are we really talking about here?

Understanding Your Budget 

Every business has different needs, and every industry has its tried-and-true marketing strategies. Therefore, budgets can vary dramatically (from as low as 0.5% to upwards of 30-40% depending on the company). On average, most businesses allocate between 7-12% of their total revenue to marketing costs.

That said, you can't put a dollar amount to your marketing if you don't know what you're including. Therefore, this initial step requires diligent research and calculation. What kinds of marketing material do you need? Print materials? Radio commercials? An interactive website? All of the above?

Start by writing down everything that comes to mind regarding your company's marketing needs. In the initial stages, this won't be a comprehensive list, but it will be a starting point for shaping your budget. After all, you will begin with a baseline budget and then divide this figure into smaller categories.

Lump Sum Dollar Approach

Some businesses choose a specific number for their marketing budget. This is a real and fixed amount based on what the company can reasonably afford regardless of company profits. 

This can be an effective method if you're looking for a single expense or short-term strategy, but it's often unsustainable for a longer-term approach (especially once you start generating sales). 

Competitor Matching

If you're unsure how to start with your budget, consider analyzing and assessing what your competition is doing. Obviously, this strategy requires diligent research, and it won't always yield you the best results. For example, you don't want to fall prey to comparing apples-to-oranges, but you also don't want to inflate (or deflate) your marketing budget based on just one other company.

Proportional Percentage Amounts

If you're established with paying consumers, one of the best ways to delegate your marketing budget is by assessing your monthly, quarterly, or annual sales revenue. As mentioned, most businesses devote around 10% of their total sales towards marketing. For simplicity's sake, if you're just starting, sticking to that round 10% is an easy enough target. 

As your company grows, it's natural for your marketing efforts to develop with such a progression. That said, if it starts decreasing or declining, you can access whether you need to either scale your marketing to coincide with your budget.

Spending Your Marketing Budget 

If you're just starting out, you're probably feeling overwhelmed by all the marketing options available to you. Furthermore, there isn't a perfect method or answer for exactly how and where to put your dollars to hard work.

Digital Content Marketing & SEO 

Regardless of your industry, your online presence is one of the most critical factors in your business's reputation. Investing in a solid digital content marketing and SEO campaign can generate you a substantial ROI. After all, optimizing these strategies can move you from Page 38974 of Google to Page 1, and that leads you to tens of thousands of potential sale conversions.

Social media also plays a major factor in online reputability. While some businesses take on the DIY approach, outsourcing to professionals often yields you faster, better, and more sustainable results. 


Email marketing offers one of the highest ROI for small businesses, and it's relatively intuitive to outsource. However, to consider this avenue, you need to determine the metrics that you care about most. For example, are you seeking to acquire new subscribers? Increase engagement or shared material? Promote the click-through rate (CTR) of checking out the links in the email?

Investing in an email marketing system (whether it's with a tech-savvy employee or outsourced company) can provide you with all of those numbers. 

Branding & Design

If you don't have a robust marketing budget just yet, focusing on streamlining your branding can still set you dramatically apart from the competition for very little money on the table.

Obtaining a custom logo, updating your web design, and creating a universal image across your social media platforms creates a consistent user experience. This helps familiarize people with your brand and solidify engagement with your audience.

Attend Relevant Trade Shows and Conferences

Even though digital marketing has taken consumerism by the proverbial storm, old-fashioned networking still has its powerful and relevant place in today's society. Interacting with people face-to-face at professional events creates a lasting impression with some of your most ideal clients. 

To maximize these experiences, it's best to invest in a high-quality booth with high-quality materials that clearly communicate your brand and message to your ideal consumers. Create a working email list to customers to invite them to attend the show. Consider hosting a giveaway of one of your products or services to incentivize people to check out your booth and learn more about what your company has to offer. 

Final Thoughts

Before you haphazardly start spending money on marketing, make sure you take the time to do your research. Understand how, where, and why you need to spend money before pulling out the plastic.

Finally, don't let your pride and ego get in the way of business. If one strategy isn't working for you, do something differently! Business represents a process brimming with trial-and-error; even though you'll make mistakes along the way, it's up to you to rectify them! 

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