Q: How do I determine my marketing budget?

As a small business owners, it’s a struggle to figure out how much of your valuable resources to commit to marketing.

Marketing budgets vary by the size of your business, the industry you are in and your growth stage.

As a small business with gross revenue under $5 million, you should follow the 8% rule.

Allocate 7-8% of your gross revenues to marketing. 

Split this budget between the costs of developing your brand presence (your website, blog, sales materials, etc.) and the costs of promoting your business with advertising, events, etc.

Keep in mind that this formula assumes you have profits of 10-12% after all expenses and marketing costs. If your margin is tighter than this, consider cutting your overall margins to invest in marketing.

(Source: U.S. Small Business Association)