Marketing experts and agencies often recommend that small businesses spend between 7 and 8 percent of their gross revenues on marketing. And, according to a study, small businesses tend to follow this rule, spending between 3 and 5 percent. In the simplest terms, your marketing budget should be a percentage of your revenue. A common rule of thumb is that B2B companies should spend between 2 and 5% of their revenue on marketing.
The average marketing budget for a small business varies depending on industry, company size, and marketing objectives. However, a good rule of thumb is to spend between 7% and 10% of your gross revenue on marketing. According to Salesforce, B2C companies should spend 15% of their revenue on campaigns. Hubspot reports that a company's average spend was 8.7% of total revenue last year.
Your marketing budget should be a percentage of your revenue. A common rule of thumb is that B2B companies should spend between 2% and 5% of their revenue on marketing. In the case of B2C companies, the proportion is usually higher, between 5% and 10%. A common rule of thumb is that B2B companies should spend between 2% and 5% of their revenue on marketing. For B2C companies, the proportion is usually higher (between 5% and 10%).
Small Business Trends reports that the average company spends 1.08% of its revenues on advertising, with variations from one sector to another. For example, retailers spend more (around 4%), while restaurants spend 1.93%. Small and medium-sized businesses (SMEs) have an advantage over larger companies because of their personalized approach to the market. A good marketing budget can help you compete with well-known companies for a share of the market share.
The specific marketing channels you use will depend on your target market and your marketing objectives. Investing between 20 and 25% of the total budget in marketing for young companies will be a good figure to start with marketing strategies. Keep in mind that marketing can easily lead you to a chicken and egg situation: your sales are falling, so you cut your marketing budget, causing your sales to decrease even more so. This is because B2C companies often need to invest in more marketing channels to reach various customer segments.
Below is a marketing budget breakdown showing the expenses you should expect when planning your marketing budget. With the expansion of channels, marketing costs have increased, as digital marketing opens many doors that require data-based approaches and emerging tools based on artificial intelligence. There are many ways to advertise online, from buying ads to investing in social media marketing (SMM) and search engine marketing (SEM).If you take advantage of all the tools available, monitor your results and learn to see marketing as an investment, not as an expense, you will achieve better results with your marketing budget. For example, email marketing apps, social media apps, and online advertising offer analytics tools that you can use to see which of your marketing messages are performing the best.
