The question can be a tough one, I will share with you a baseline that I use to give you some guidelines to consider. Your ambition in combination with a good financial model will be your starting point. Now that you are convinced that marketing is critical to the growth of your business, let’s also assume for now that you know how you want to spend your money (ads, SEO, social media, email marketing, etc.) and what the right mix (inbound, outbound, digital, print, etc.) is for your business (we will cover this in detail in a future post). The question is how much should you spend? The answer begins with your goals. Let’s assume you want to grow your business at an annual rate of 7% to 10%. I would suggest a range of 2% to 10% of revenues as a floor and a ceiling as a foundation. The sweet spot would be between 3% to 7% depending on what economic cycle (expanding, contracting) your industry is in or the overall economy if your business happens to follow it. I suggest your budget fluctuate between these two poles. If you are at 6% and revenues are declining because the economy is shrinking you might pull back to 3% to 2%. If you are at 3% and the market starts to get hot you might want to push your budget to 5 to 7%. Different industries have different financial models and therefore allocate much more than 10% of revenues for example retail. However no industry or model would suggest less than 2% of revenues. Start with a small budget and increase as your expertise grows. Marketing can be one of the most rewarding activities in brand building. Get started and have fun!


Maxwell Akira