Building a business is a huge mountain to prepare to climb, but the reward at the top is worth every stride on the trail. One facet of business development you’ll need to consider is your marketing strategy and how much to spend on your marketing efforts. The typical marketing budget for a startup varies, but you can count on it being a significant investment. Commit to investing in this branch of your business; it is the strongest (if not the only) way to get your business off the ground and running.
Let’s take a deeper look at plotting your marketing budget and how much to invest in each element.
How much should a startup spend on marketing?
Startups and small business should plan to spend about 7% to 8% of their gross revenue on marketing and advertising. If profit is falling below $5 million annually, the U.S. Small business Administration suggests bumping marketing spend up to 10% to 12% of gross revenue. It’s safe to aim for a middle number and adjust your budget as you watch sales and growth projections manifest and soar or fall short of expectations.
Is marketing spend the same in every industry?
The marketing budget percentage by industry might shift. Depending on market saturation, you might need to spend more or less than the suggestion to boost your brand’s prevalence amongst competitors. Before developing your marketing strategy and spend, run a thorough competitive analysis that allows you to gauge how much work you have ahead. Keep an eye peeled for windows of opportunity to connect with and win niche audiences as your loyal consumer base.
Where should I spend the most?
Where you invest your marketing dollars is just as important as how many of them you invest. First, check off the basics:
- Social media
- PPC ads
Once your marketing budget has covered the foundation of your online presence, hone in on your digital marketing strategy. In today’s technologically infused world, the internet is the most obvious place to find a business. Every year, fewer dollars are spent on traditional advertising modes (though some still serve as valuable complements to digital assets), and more dollars are invested in digital modes of communication.
How much budget should I dedicate to digital marketing?
Small businesses should plan to spend 3% of total revenue on digital marketing. If you are following the SBA’s suggestion of 7%-8% total marketing spend, that’s almost half of your budget. Digital marketing is important, expensive and worth every penny.
What’s the most important digital marketing asset to invest in?
Make sure to invest in mobile. In 2018, mobile is more important than ever, so portion off a generous bit of your marketing budget to optimizing your website for mobile users, developing apps, setting up push notifications and finding clever ways to connect with consumers in the palms of their hands.
If you are a small business or startup, working with a professional digital marketing agency is one of the best investments you can make to catapult your company toward success. To learn more about the average marketing cost for small business endeavors, the resources available to you and the tools necessary to jump-start your brand vision, get in touch with our savvy squad at Rosy Strategies.