The marketing budget usually ranges from 5 to 25 percent of a company's revenues or revenue objectives, depending on the size of the company, the stage of growth and the importance of marketing in sales in the company sector, among other factors. In simple 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 revenues on marketing. Understanding how to create a marketing budget is a key element of any marketing plan.
Once you've made your marketing budget, you should keep track of it to make sure you stay within your marketing budget. We'll explain how to do that, and we'll even include a free marketing budget template to help you get started. You don't want to enter the market without having a clear picture of the market. You should conduct market research to understand your target audience.
That includes demographics, customer needs, etc. But don't neglect your competition, as they compete for the same customers as you. Identify the competition and list what you have in common with them and how you can differentiate yourself. A marketing budget generally covers the costs of advertising, promotion, and public relations.
Each amount varies depending on the size of the company, its annual sales and the amount of advertising from the competition. Depending on the industry, marketing budgets can range from as little as 1% of sales to more than 30%. Startups can spend up to 50% of sales on introductory marketing programs during the first year. Smaller companies may simply try to match the expenses of their direct competitors.
Monitor marketing costs and results throughout the year to better determine the effectiveness of your budget. The budget is developed by estimating the expenses needed to achieve the desired marketing objectives. The marketing budget is usually made annually, although it can be quarterly, and revenues are estimated to determine how many resources will be used during that budget period. ProjectManager is an online project management software that helps you plan and track your marketing budget.
Every business marketing plan must include a marketing budget, a specific amount that the company will allocate to promoting its goods and services. While a marketing budget template won't provide you with real-time data and will require you to manually enter all the financial information for the marketing campaign, it's still a good start if you don't have project management software. Manage your marketing well and you may find yourself in the enviable position of figuring out how to manage high revenues. Something as simple as changing a photo in a Facebook ad and increasing your budget by just a few dollars a day could make a big difference.
To draw up a marketing budget, you must think about your sales funnel and set short- and long-term objectives, while establishing key performance indicators (KPIs) to track your performance. As you better manage your marketing budget, the best investments you'll make will include analysis tools and marketing automation solutions that help you analyze your overall marketing performance and streamline repetitive tasks. Between the thrill of launching new promotional initiatives and the routine of repeating marketing campaigns, founders and management teams have the underlying assumption that their advertising dollars are being spent wisely.