Define your Marketing Budget to plan for Success

17 Oct

I recently got a call from an old high school buddy, who owns a Roofing company, inquiring about marketing ideas for his business.

My first question asked; what does your current marketing plan entail?

We’ll call my friend Don. Don replied he did not have a specific budget or plan.

On further questioning I found Don utilizes direct mail, yellow page ads, local print ads, flyers, and door-to-door canvassing for his efforts. I asked how this was working for him, and he said just fine. So I asked why he was calling me? Don said he was not getting any leads via his web site and wanted to know why?

I did a little research and found a typical conundrum. Nice site, little traffic and absolutely no SEO. I could not find Don’s business with search terms for a roofing company in his area on any page, let alone the first two. I did however; find thirty other roofing companies in his area.

Don’s business had spent the money to ‘build it’ but ‘they did not come.’ What happened?

While a marketing plan will give your business marketing goals, a marketing budget helps you figure out practical steps to achieve those goals.

What goes in a marketing budget?

A marketing budget typically covers costs for advertising, promotion and public relations. Each amount varies based on the size of the business, its annual sales and how much the competition is advertising. Depending on the industry, marketing budgets can range from as low as 1% of sales to over 30%.

Here’s a few basic principles in defining a marketing budget.


Allocating a specified percentage of sales revenue is one of the most popular methods for developing a marketing budget. The average allocation usually ranges between 9-12%, while the smallest businesses may go as low as 1%.

The Dollar Approach

Many businesses simply set a flat dollar amount for their marketing budget. Particularly useful for small businesses, they can base marketing budgets on what they think the company can afford instead of the company’s sales.

Matching Competitors

Another method to create a marketing budget is to analyze and estimate what the competition is spending and copy them.

Marketing Plan Objectives

Often considered the most effective budgeting method, this method uses the objectives in the marketing plan to determine the marketing budget.

Whichever approach is taken, a formal budget will help define the marketing needs of any company to further your success.

As to Don’s interests, he seemed undecided on an immediate path, but I’ll bet he initiates a marketing plan and budget and looks into media management options since having our conversation.

Thanks for reading and be sure to like us on Facebook.


Kent McCracken

aka Media Mark

Free consultation here.


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