Whether you own a startup or a business that’s been around a while, you probably struggle with developing a marketing and advertising budget. It’s okay; we really do understand. With so many other things to pay for on a daily basis, including inventory and staff, marketing can sometimes be shuffled to the side. While we understand your reasoning for doing so, we can’t help but cringe when that happens.

See, marketing and advertising help you grow your business. Every time you put off marketing or cut your budget for advertising, you miss one more chance to reach new buyers. And when you miss those chances, you lose out on revenue. That revenue could have been spent on more marketing or on the day-to-day expenses of your business. This is our way of saying, “You have to spend money to make money.”

And it’s true. You really do have to put some time, effort, and money toward your marketing and advertising if you want to continue growing your business. But how can you determine the best amount to spend when you already have so many other financial responsibilities? This guide might help you a little bit.

Consider What You’re Selling

There is no tried and true formula for marketing spend, but you definitely don’t want to overdo it. In most cases, service-based companies will invest more into marketing and advertising than retail-based. Larger, more established brands will spend less than start-ups, rebranded, or growing companies. There are a few reasons for the differences, so keep these in mind when you’re planning.

Let’s break things down a little more.

Retail and Ecommerce

When you sell specific products, particularly those that are unique to your brand, the goods you sell are often out there marketing and advertising for you. Cars, liquor, athletic apparel—all of these rest on their brand to do much of their advertising for them. If your brand is as recognizable as any of these, you can also do the same.

If you’re still getting started, or if you market goods that several other competitors sell, then you can’t rely on your brand. You’ll need to make up some of the difference with a bigger marketing budget. Your marketing dollars will work toward creating a strong brand for your business so that you can rely on your good name later down the line.


As you might have already guessed, service industries can’t rely on goods to spread their brand name. That’s why these businesses often must invest larger amounts into marketing and advertising. This helps them keep their brand at the forefront of buyers’ minds, to build trust with consumers, and introduce new offers to the public.

Some larger service brands, such as large hotel chains, easily recognized recruiting firms, and even widely known advertising agencies can rest a little bit on their brand recognition. This means they can afford to spend less on marketing. Startups, small businesses, and growing companies all need to invest more. Also, upscale brands often spend more to maintain and build upon their reputation. The Four Seasons hotels don’t just have a larger budget for marketing; they spend a larger percentage of their revenue.

What Kind of Numbers?

The suggestions can vary, but starting with 10% of your yearly revenue isn’t a bad idea. Most will make the mistake of starting small and spending more when the company grows. The problem is that you can’t grow if you’re not investing in your marketing plans. How can you build relationships with your buyers if you haven’t spent enough to reach them?

As you grow, then you can begin to cut your marketing budget. Brand recognition will begin to take over, and you can relax your advertising strategy. Just remember that building relationships takes time. You wouldn’t trust someone you just met in the bar, right? Consumers need more than an introduction to your business before they start spending money with you.

If you’re ready to grow your business, to create marketing plans that make a difference, then we’re here to help. Reach out at any time.

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