Is there a standard percentage of revenue to allocate for a marketing budget?
Some people advocate using 5%-10% of your “target revenue” for marketing. A better way is to develop a marketing budget based on your goals. One way is to estimate the costs for all the activities you plan to do, and then prioritize to arrive at a marketing budget that makes business sense. The key is to start with your marketing goals, for example: • meet 100 potential customers • keep in contact with past customers at least 2x a year • add e-commerce function to web site to facilitate Internet sales, and so on. Let’s say networking is the best way to achieve your goal of meeting 100 potential customers. Budget for networking activities as your highest priority. For example, lunch or dinner once a month at average $30 each time would equal $360 for the year for that activity. I upgrading your web site is critical to sales, make that a top priority for your marketing spending. Another method is to pick a dollar amount that you will invest in marketing – monthly or quarterly for 6 to 12
