Best Brand Budgets

How Much Do you Spend on your Marketing Budget?  You have to spend money to make money. Keep in mind that marketing efforts have a direct bearing on your revenue. Now is not the time to be penny wise and pound foolish.  How much should you spend on your marketing budget? It depends on how much you want to grow and how fast!  

Great "food for thought" from SCORE when establishing your marketing budget. "Often, small businesses estimate their sales revenue, cost-of-goods, overhead and salaries, and then gross profit. Anything left is considered available funds for marketing support. That's not such a good idea. … If you are the new competitor in the marketplace, you will have to spend more aggressively to establish your market share objective.

Guidelines for your Marketing Budget.  Two areas to be considered when defining your marketing budget:

(1)   The development or refinement of the brand and the channels used to promote the brand. These include logos, Web sites, blogs, e-mail campaigns, sales presentations, brochures, ads, etc.

(2)   The ongoing expense of promoting and advertising your brand to your customer base and your prospects.

Both the Counselors for America’s Small Business (SCORE) and the US Small Business Administration (SBA) define the variable for a proper marketing budget as follows:

Company GROSS Revenue             Marketing Budget

Less than $5 Million                            3 – 6%

$5 – $10 Million                                  6 – 7%

$10 – 50 Million                                  5 – 6%
            
NOTE:  Now, look at what your competitors who are market leaders are spending. If possible, create a budget accordingly. Otherwise, instead of taking a small percentage of your company's GROSS REVENUE (as seen above), invest a larger percentage of your company's NET REVENUE, about 4 – 7%.