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Let's start with something we all know - setting a marketing budget isn't easy. Maybe you've been winging it until now, spending when you need to and hoping for the best. Or perhaps you're staring at spreadsheets wondering if there's a magic formula you're missing. (Spoiler: there isn't, but that's okay!)
Why marketing budgets actually matter
Here's the thing - marketing isn't just about spending money to make money. It's about investing in your business's growth in a way that makes sense for you. When done right, a solid marketing budget helps you make better decisions, track what's working, and grow sustainably. No smoke and mirrors, just practical business sense.
The truth about how much to spend
The U.S. Small Business Administration suggests spending 7-8% of revenue on marketing if you're making less than $5 million annually. It's a decent starting point, but let's be real - your business isn't exactly like anyone else's. Your perfect number depends on:
Your industry (some naturally need more marketing muscle than others)
Your growth stage (startups often need to spend more to get noticed)
Your goals (maintaining market share needs different spending than aggressive growth)
Your market position (well-known brands can often spend less than newcomers)
Your profit margins (they determine how much you can realistically invest)
When should I create a marketing budget?
You should put together your marketing budget at the end of your marketing planning. Once you know your goals, marketing channels and tactics, you can work out what you need to spend to stand a chance of achieving your goals. There’s no point in assigning money to activities if you don’t know what you’ll be doing. If you would like some help putting together a marketing plan you can follow my How To series or get in touch with me!
A practical approach to building your budget
Step 1: Get real about current spending
First up, let's look at what you're already spending. Pull out those credit card statements and find all your marketing-related expenses. Yes, even that social media scheduling tool you signed up for and forgot about. Knowledge is power, and knowing your starting point makes everything else easier.
Step 2: Identify what's actually helping your business
This is where honesty really pays off. Look at everything you're spending money on and ask yourself:
Is this bringing in business?
Does this make our customers happier?
Are we getting good value for money?
Sometimes the answers surprise you - in both good and bad ways. That's perfectly normal and exactly why we're doing this exercise.
Step 3: The resources reality check
One of the most valuable things you can do is be honest about your resources - both time and money. Sure, you could learn to do everything yourself, but is that really the best use of your time? Sometimes hiring experts isn't just easier - it's actually more cost-effective in the long run.
Think about:
What your team is genuinely good at
Where you need outside expertise
How much time you really have
What skills are worth developing in-house
Step 4: Smart planning for real results
Now comes the fun part - planning where to invest your marketing budget. Instead of following generic advice, think about:
Your foundation: These are the basics you need to keep things running - your website, essential tools, and core content creation. Think of it like keeping the lights on - not exciting, but necessary.
Your growth drivers: These are the marketing activities that you know bring in business. Maybe it's Google Ads, maybe it's trade shows, maybe it's email marketing. Whatever works for your business, that's where a good chunk of your budget should go.
Your experiments: Set aside some money to try new things. Not everything will work, and that's okay - the goal is to find new opportunities while managing risk.
Making sense of marketing results
Let's be honest about something - marketing results aren't always crystal clear. Yes, digital marketing gives us lots of data, but people don't always follow a straight line from seeing your ad to becoming a customer. That's not a problem - it's just how people work.
The key is measuring what matters for your business. Sometimes that's direct sales, sometimes it's leads, sometimes it's brand awareness. What matters is that you're tracking the right things for your goals.
Building a budget that works
The best marketing budget is one you can actually work with. It should:
Cover your essential marketing needs
Focus on what's proven to work for your business
Leave room for testing and learning
Be flexible enough to adjust as you learn more
Feel comfortable for your business's financial situation
Moving forward
Creating a marketing budget isn't about finding perfect formulas or following someone else's playbook. It's about making smart decisions based on what works for your business. Start with the basics, measure what matters, and adjust as you learn.
Remember - good marketing builds over time. It's not about finding quick fixes or magical solutions. It's about consistent, thoughtful investment in your business's growth.
Ready to get started? The best time to begin is now. And if you need help figuring out your next steps, drop a comment below. Let's talk about what makes sense for your business - no cookie-cutter solutions, just real conversation about real business growth.
P.S. Looking for a quick win? Start by listing everything you're currently spending on marketing. You might be surprised by what you find!
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