How to Set a Marketing Budget for Your Business to Accelerate Growth

When it comes to spending money, I see a lot of small business owners holding on tight to their cash. I get it—we work hard for it and it’s hard to part with it, especially when cash ebbs and flows like the tide. But if you want to grow your small business, take a lesson from the big companies—they typically budget 5% to 10% of annual revenues on marketing.

So if your business earned $60k last year, you should budget up to $6k for marketing this year.

If that sounds like a lot, consider the consequences of not making this investment. Marketing is the fuel for your engine. Without it, the car can’t run—and the business will be much harder to grow. You may instead choose to run your business on a shoestring, investing your TIME instead of dollars in marketing efforts. But there are two main problems with shoestring marketing:

Time still costs money. Your personal labor should be factored into the equation. If you earn $75 per hour and spend 10 hours per week on marketing, you’re technically spending $39k per year on marketing! Are you getting great results from those efforts because you should be at those rates! And by the way, every hour spent on your own marketing is an hour of lost revenue.
You limit your growth. When your marketing plan is based solely on your efforts, you miss out on tactics that could be getting a lot more mileage. You can’t compensate for a well-placed ad in an industry publication or a pay-per-click campaign that converts leads daily. Trying to do all of your own marketing is like trying to build your own house with no previous experience. Sure you can find ideas and figure a lot of things out, but it would get done a lot faster and the foundation would likely be more stable if you invested in some expertise.
So consider what you’re missing out on by failing to invest in marketing your business, and what your business could look like if you invested 10% of your revenues to get the marketing wheels cranking. Soon your small business might not be so small after all.


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