How To Set A Marketing Budget

You’re not going to like this. No one ever does. But setting a budget for marketing is always a difficult task. Business experts and academics, all smarter than I am, have, in the past, advanced formulas and prescriptions for creating budgets appropriate to a company’s size and its marketing challenge. I have no idea if any of those recipes work. The Small Business Administration notes that a business with less than $5 million in annual revenue should allocate between 7–8 percent of that revenue to marketing. Furthermore, they suggest splitting those resources between brand development (websites, blogs, collateral) and promotional activities (campaigns, events, etc.) But what they don’t explain is how they come to that figure in the first place. Why is 6.9% too little? Why is 8.1% too much?

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