How to Create a Marketing Budget For Your Small Business

Every business must invest in marketing to attract customers, boost sales, and stay competitive. However, many small business owners need help determining the appropriate amount of expenditure.

The appropriate budget hinges on your business type, objectives, and revenue. Here are some suggestions from experts to devise a marketing budget suitable for your small business:

1. Begin by researching your industry. The marketing budget should be a percentage of your small business’ revenue. B2B companies typically allocate 2-5% of revenue to marketing, while B2C companies often spend 5-10%. Investigate industry standards and competitor spending to refine your target budget. A 2019 survey found that small businesses spend an average of just over $30,000 annually on marketing, with larger companies allocating double or more.

2. Establish clear objectives. Your marketing goals should have a time frame, quantitative measures, and specificity. Define targets such as website traffic or customer visits and align them with your customer segments and value proposition. Regularly review and change the plan to ensure it remains effective.

3. Consider all potential costs. Allocate your marketing budget across various categories, including website maintenance, social media advertising, online advertising, traditional media, e-newsletters, video marketing, and staff training. Adjust allocations based on effectiveness over time.

4. Monitor costs and adjust regularly. Keep meticulous records of expenditures and analyze web analytics consistently. Review your marketing budget quarterly and annually to ensure alignment with actual spending. Refine your approach over time for greater accuracy.

By following these steps and continually evaluating your marketing efforts, you can develop more precise budgets and maximize your business’s marketing effectiveness.