ANSWER: How much should I budget and spend on marketing?

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Over the years we’ve worked with all types of businesses and organizations, big and small, for profit or non-profit, new and old, service, manufacturing and retail. The first question when we meet is always the same “How much should I spend to market my business?” Now old business can sometimes have a better handle on this than new businesses (not always!) but beware of falling into old habits! Marketing changes quickly and you need to be proactive and evolve!

The simple answer is 3-5% of your total sales (not profit…sales).

While you are strategizing, planning and setting goals it is important to ensure you’ve done the appropriate research to understand the market you are competing in. With the right understanding of the market and your resources as a business you can take the necessary steps to set a sales goal. With a sales goal in hand, you can determine an appropriate marketing budget.

Common mistakes with budgeting and marketing:

  1. Cutting your marketing budget.
    A cut to the marketing budget appears to be the easiest way to “save money” quick but beware of this double edge sword. Good marketing is built up over time and by being consistent, you may not see the negative impact right away but be sure it will cost twice as much to fix the damage once you start to see the decrease in your sales.
  2. Spending too much on marketing.
    Some businesses love to see their name all over the place! This has its benefits in reassuring your clients and staff that you are a vibrant, successful business however too much is too much.
  3. Marketing without a plan
    Some business owners fly by the seat of their pants when it comes to marketing and buy into whatever media sale lands on their lap. Not to mention, Facebook has made it really easy to boost a post, but his can add up and in the long run not be as effective as proper planning. Not having a plan can also lead to confusion in your brand image and messaging and mean that you are not spending your money effectively.
  1. Using only one strategy.
    We’ve all heard the saying; “don’t put your all eggs in one basket.” The same principle applies to marketing. You can make a really great website, but you need to advertise it to let people know its there. If you spend your whole budget on one campaign and can’t afford anything else you may not meet your sales goals for the year.
  1. Not measuring the success
    Why spend $100, $500 or $1,000 without knowing how that money has contributed to your sales? Reporting tools are very sophisticated and easy to use when it comes to most types of advertising and marketing strategies, every dollar spent should be accounted for.

There are a lot of variables that come into play when determining your marketing budget. While 3-5% is a good starting point, every business is unique in their needs. The best advice is to do your research and create a plan.

You can always save money by doing some things on your own but it’s a great idea to have professionals at hand to make sure you are making money, meeting your goals and focusing on what you do best!

If you would like to learn more, ask us for a free consultation with one of our marketing professionals email us at


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