What Percent of Your Revenue Should Go To Business Marketing?

There is no one answer for every company when it comes to figuring out how much you should spend on marketing. However, for our clients, I like to identify a few things before posing an answer to this question:

  1. How long have you been in business?
  2. Is your business financially healthy (gross and net)?
  3. How much money do you have saved?
  4. How competitive is your market?

These questions usually help me understand the situation a little better. If you haven’t been in business for long, you need to determine how fast you want to grow. Do you want to grow fast? 15% of your gross sales is an aggressive budget for marketing which can get you on your local business radar quickly. If you’re established, but you still want to grow aggressively, a healthy budget should be 8 – 12% of your revenue. A modest budget for an established business would be between 6 – 8%.

Keep in mind that all of this is based on the principle that you’re tracking the success of your marketing, and maintaining effective marketing strategies that give you a steady return.

austin

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