5 Steps to Creating a Small Business Marketing Budget

Almost all businesses plan to increase their investment in at least one digital marketing channel in the next year. Many small businesses may not have properly budgeted out their marketing strategy. This article will help small businesses create their first marketing budget, focusing on what should be included and how to avoid some common mistakes.

  • Match spending to revenue
  • Make wise spending decisions
  • Correct the course as needed
  • Utilize best practices

1. Get to Know Your Customers

Before creating a marketing budget, a small business owner needs to know which channels to use to reach potential customers. This consideration requires a deep dive into your target audience to learn as much information as possible.

  • What is your target income level?
  • What is your target geographical area? Suburb? Big city? Rural area?
  • What brands does your target audience interact with regularly?
  • Number of leads generated per month
  • Number of leads converted to sales qualified leads (SQLs)
  • Cost to generate SQLs
  • Number of leads converted into opportunities
  • Number of opportunities that close as new deals
  • Average value/revenue for a new deal

2. Base Your Budget on Revenue

Many businesses allocate a percentage of actual or projected gross revenues to marketing, usually between 3–5% for small businesses. But the correct allocation actually depends on several factors, including your industry sector, your business capacity, the amount of growth you can reasonably handle, and how quickly you need to make an impact.

  • Website
  • Blogs
  • Sales collateral
  • Costs of promoting your business:
  • Campaigns
  • Advertising
  • Events

3. Spend Your Budget Wisely

Knowing how much you have to spend on marketing is critical, but even more crucial is knowing exactly how to spend your marketing dollars. You need to have a plan.

  • CRM software
  • Website hosting fees

4. Test, Revisit, and Revise

Once you develop a marketing plan and budget, remember that it doesn’t have to be fixed. There may be times when you need to change things, such as running another campaign or event to capitalize on great timing.

5. Follow the Leaders

You should thoroughly research and understand current and future marketing trends to better navigate the marketing budgeting process.

Getting Started

If you are not sure exactly what to try when creating a small business marketing budget, you can simply brainstorm ideas for productive ways to market your small business without breaking the bank. Start simple with your goals. Keep your audience in mind. Remember that there are countless platforms, channels, and marketing techniques that you can try.

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