How Much to Spend On Marketing?

“What percent of my budget should I spend in advertising and marketing my business?”
John
CallFinalPick

The percent of your budget you spend on marketing will vary depend on a number of variables. If you’ve just started your business, plan on spending 20-30% of your net revenues on marketing. Some new firms spend even more, 50-70% in an effort to build up their customer base. If your revenue target for your first or second year in business is $200,000 you should plan on spending between $40,000 to $60,000 on marketing.

If you’ve been in business for a number of years and already have an existing client base and want to keep growing you’ll need to spend 1-15% of your net revenues on marketing. Let’s say you’ve been in business for ten years and want to earn $300,000 in 2005, depending on your business you should plan on spending from $3,000 to $45,000 dollars on marketing. – Charlie Cook