Well, the answer is ‘it depends’. Perhasp not what you want to hear, but it’s a fact that no business is the same, so the amount allocated to marketing shouldn’t be either.
It depends on turnover, profitability, business objectives, competitive situation, target audience, brand awareness….
A rule of thumb is that businesses should spend around 5-10% of revenue on marketing. But for those businesses that don’t have their marketing foundations in place this figure is more likely to be 20%. By foundations, we’re talking about things like: Marketing Strategy, Brand, Website.
This is most likely to be relevant for startups, or businesses that want to accelerate growth. For start-ups, that can be a chicken and egg situation. You need to grow awareness and drive sales but have no money to do it. So you cut corners, spend as little as possible. But there’s nothing worse than spending the limited money you do have on something that’s not fit for purpose – you’ll only have to do it all over again further down the line. And that will cost more. So when you need to put the foundations in place, make sure your marketing is well funded. Make sure you’re building something that will stand the test of time. Strong marketing foundations are a critical part of any business strategy and it pays to get it right first time around.
It you need some really helpful guidance, get in touch today.