Creating a Small Business Marketing Budget

How much you should need to spend

By Tracy Thomas
Rev Marketing 2 U, Inc.

Every new small business entrepreneur is deeply concerned with how much effort they need to devote to their marketing. People need to know about your great products and services if they’re going to patronize you.

Unfortunately, there’s quite a bit of misinformation floating around out there. Here are some tips on discovering your ideal marketing budget.

First things first, there’s no magic number. Although some people will quote explicit percentages for how much of your revenue you need to put back into marketing, it really varies.

Trying to simply solve the problem using some predetermined quantity shows a lack of foresight. If you decide to spend a certain amount of money on marketing yet you target the wrong market, it’s like you’ve wasted the money anyway. Instead, you need to budget your marketing expenditures in a reactive manner.

The best way to determine how much you should spend is to look at what you spend now and where it gets you. Does your social media advertising budget bring in the conversions you desire? Do you find that you’re constantly adding more money to certain weak campaigns? If you go from where you’re at currently, you can figure out a baseline and make changes. There are formulas but it has to be based on your specific industry and be monitored and measured.

Digital content and online marketing is a good place to start analyzing your strategy and return on investment. Ideally, you should be able to track every hit, every banner click from an external site and every subsequent page visit to your own portal. Once you see exactly how much money you net from each form of advertising, you’ll understand where you need to focus.

Remember, it’s not about how much money you spend, it’s about how well it was spent. Analyze your marketing expenditures and their results to improve your business marketing budget and learn to strengthen your buying funnel for a strong ROI.

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