How to Set a Marketing Budget That Works for Your Business 

Let’s be honest—most business owners don’t relish the idea of spending their hard-earned dollars. It’s a lot more fun to focus on earning more business than to sit down and plan how to spend your money. So when it comes to spending money on marketing, a lot of businesses just wing it. 

The problem? Winging it usually leads to one of two things: either you underspend and wonder why you’re not seeing results, or you throw money at random tactics and cross your fingers. Neither is a great strategy. 

A marketing budget isn’t just about setting a number and calling it a day. It’s about making sure you’re spending smart—allocating your money in ways that actually move the needle. And the good news? It doesn’t have to be complicated. 

What Happens When You Don’t Have a Marketing Budget? 

A well-planned marketing budget helps you spend wisely and strategically. But many businesses take the “we’ll figure it out as we go” approach, which can lead to: 

• Inconsistent marketing efforts – Some months, you’re all in. Other months, marketing falls to the back burner. That stop-and-start approach makes it harder to build momentum. 

• Wasted money – Without a plan, it’s easy to overspend on channels that don’t deliver or underinvest in the strategies that actually drive revenue. 

• Panic cuts when business slows down – Marketing is often the first thing to go when budgets get tight, when in reality, consistent marketing is what keeps your pipeline full. 

• Missed opportunities – If you’re only making reactive decisions, you might be overlooking channels or tactics that could drive long-term growth. 

A defined budget keeps your marketing focused, strategic, and sustainable, ensuring every dollar works toward your long-term business goals. 

How to Set Your Business’s Marketing Budget 

Ready to get organized with your business’s marketing? Let’s start by creating a smart, effective marketing budget for your business.  

Step 1: Determine How Much Your Business Should Spend on Marketing 

The first step in setting a marketing budget is understanding how much money you have to work with. Typically, small to medium-sized businesses spend about 5-10% of their revenue on marketing, but this can vary depending on your business’s goals, growth stage, and industry. 

➡️ Take Action! 
Take a look at your revenue from the past year and decide how much you can realistically allocate toward marketing. If you’re in a high-growth phase or launching a new product, you might consider allocating more. For more established businesses, you might spend less but ensure that every dollar counts. 

Step 2: Define Your Marketing Goals 

Before you allocate any funds, you need to identify your marketing goals. Are you focused on brand awareness? Lead generation? Increasing online sales? Defining your goals will help you make smart decisions about where to invest. 

➡️ Take Action! 
Write down 3-5 specific, measurable marketing goals for the upcoming year. If, at the end of the year, you can’t answer with a definitive “yes” or “no” that the goal has been fulfilled, it’s not specific enough. 

Step 3: Break It Down by Marketing Goals 

Not all marketing efforts serve the same purpose. Instead of focusing on any particular tool or platform, start with your goals and align your strategy accordingly: 

• Brand Awareness – If you need to get your name out there, focus on social media ads (Facebook, Instagram, TikTok), tv and video streaming ads, display ads, and YouTube. These channels help build recognition and keep your brand top of mind. 

• Lead Generation – When your goal is capturing potential customers, Google Search Ads, paid social, and SEO should be priorities. Email marketing and gated content can also help nurture leads. 

• Customer Engagement & Retention – If you want to keep customers engaged, focus on organic social media, email marketing, SMS campaigns, and loyalty programs. Content marketing, like blogs and videos, can also provide value and keep them coming back. 

• E-Commerce Sales – Running an online store? Google Shopping ads, retargeting ads, influencer marketing, and email campaigns can help drive conversions. 

• Local Foot Traffic & Appointments – If your business relies on in-person visits, Google Business Profile optimization, local SEO, geotargeted ads, and direct mail can drive people through your doors. 

By prioritizing your goals over specific tools, you’ll create a marketing plan that actually moves the needle instead of throwing money at every new trend. 

➡️ Take Action! 

Start by identifying your top marketing goal for the next quarter. Then, choose two to three marketing channels that best align with that goal. Focus your budget there first, track performance, and adjust as needed—rather than spreading yourself too thin across every possible platform. 

Step 4: Factor in Marketing Tools, Software, and Professional Services 

Most small business owners don’t have the time (or the expertise) to do everything in-house. That’s where marketing tools and professional services come in. 

You might need software to manage social media, send email campaigns, or analyze website traffic. But beyond that, you’ll likely need to budget for professionals—whether it’s a designer for your branding, a copywriter for your website, or an agency to handle paid ads. 

➡️ Take Action! 
Be realistic about what you can handle internally and what makes more sense to outsource. Hiring experts may seem like an extra expense, but it often saves money in the long run by improving efficiency and results. 

Step 5: Anticipate Unexpected Costs 

Things don’t always go as planned. New opportunities, seasonal promotions, or urgent needs may arise, so it’s important to have room for flexibility in your budget. 

➡️ Take Action! 
Set aside a contingency fund for those unexpected costs that come up throughout the year. This will give you the flexibility to act on new opportunities or handle any sudden marketing needs. 

Stay Flexible and Adjust 

Nobody likes to spend money—especially on something that doesn’t have an immediate, tangible return. But worse than spending money is spending it with no clear plan or strategy. A well-thought-out marketing budget helps you make smarter decisions, track what’s working, and avoid wasting money on tactics that don’t move the needle. 

Set your goals, spend intentionally, and adjust as you go. Your future self (and your bottom line) will thank you. 

Try this plan for your own business and let us know how it goes!