How Much Should You Spend on Marketing?
A Simple Marketing Budget Guide for Business Owners
Figuring out how much to spend on marketing can feel overwhelming. Spend too little, and no one knows you exist. Spend too much, and you might waste money on things that don’t bring results. So, how do you find the right balance?
Here’s a simple, practical approach to help you determine the right marketing budget for your business.
Keep scrolling.
ONE
Use the Revenue Rule of Thumb
A quick way to estimate your marketing budget is to use a percentage of your revenue:
5-10% of revenue → If you're an established business with steady customers.
10-20% of revenue → If you're a newer business or want to grow aggressively.
💡 Example: If your business makes $500,000 per year, a reasonable marketing budget might be between $25,000 and $50,000 annually ($2,000–$4,000 per month).
TWO
Consider Your Business Stage
New Business? You’ll need to invest more in marketing to build brand awareness and attract customers.
Growing Business? Spend enough to maintain momentum and keep expanding.
Established Business? Focus on retaining customers while scaling smartly.
THREE
Factor in Your Goals
Ask yourself:
✅ Do I need more customers right now?
✅ Do I want to grow slowly or quickly?
✅ Am I launching a new product or service?
If you’re in “growth mode,” allocate more to marketing. If you’re in “maintenance mode,” focus on the most effective channels and optimize your spend.
FOUR
Balance Costs with Results
To avoid overspending or underspending, track these two numbers:
Customer Acquisition Cost (CAC) – How much does it cost you to get one new customer?
Customer Lifetime Value (CLV) – How much revenue does a customer generate over their relationship with you?
💡 Rule of Thumb: Your CAC should be much lower than your CLV—otherwise, you’re spending too much to acquire customers.
FIVE
Start Small & Adjust as Needed
If you’re unsure how much to spend, start small and increase as you see results. Test different marketing channels and double down on what works.
💡 Smart Approach: Allocate 70% of your budget to proven strategies (ads, SEO, email) and 30% to testing new ideas (video, partnerships, influencer marketing).
CONCLUSION
Marketing is an Investment, Not an Expense
Marketing isn’t just about spending money—it’s about generating a return. When done right, it pays for itself by bringing in new customers and growing your business.
Still not sure what to budget? Schedule a free call with Westmir, and we’ll help you create a marketing plan that makes sense for your business.
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