Many businesses ask exactly how much of their revenue should be spent on marketing. There is no one exact answer, however, there are a few guidelines to follow when determining your marketing budget.

The industry you are in will have a lot to do with setting your marketing budget ‘sweet spot’. If you are looking for an across the board answer, a general rule of thumb is 5% of your current revenue should go toward maintaining your current visibility in the marketplace. If you are looking for a boost in sales, a good rule of thumb is to double that amount.

The Small Business Administration (SBA) recommends that small businesses, defined as an annual revenue under $5 million, should allocate 7-8% of its budget to marketing. Again, these numbers can vary. B2C companies typically spend a higher marketing percentage than B2B companies. Highly competitive industries will need to at least double that SBA recommendation to gain or maintain a foothold in the industry.

No matter what you set your marketing budget at, be sure it is a budget you can sustain for one year, at the absolute minimum. Expecting to roll out one or two marketing campaigns and achieve desirable results is entirely unrealistic. Consumers and businesses need to feel comfortable with your brand on some level before making a commitment. Even if they can’t recall how they know your brand, if it feels familiar to them it will create a feeling of  confidence. We know on average a person will need to be exposed to your brand 5-7 times before recalling and/or responding.

Always keep in mind that as with anything, it takes money to make money. Marketing is an investment, and one that doesn’t yield results overnight. No good investment will yield immediate results overnight. Maintain discipline and stay the course, you will reap the great fruits of your labor in good time. Make sure you speak with a savvy marketing consultant to help guide you in your marketing ventures.

Photo by bpixch.