Share on Pinterest

Marketing Budget Template

This free marketing budget template will help you to identify where you are spending your dollars and how that pattern compares to your marketing budget.

ducks-flying

It is imperative that a business proactively set a marketing budget for their business. The reason is simple, if you don’t set a budget and make a plan, you will instead make a series of small, and at the time, inconsequential  choices to promote your business that are both costly and ineffective. At the end of the year, you will have spent a lot more and gained a lot less than you otherwise would have, if you had a plan and a marketing budget.

Getting your hands around a company’s marketing expenses isn’t easy. And that’s only the first step. The second step is determining how much you intend to spend on your marketing budget during the course of the year. And the third step is making the best choices within the marketing budget to leverage against each other, giving you a 1 + 1 = 3 effect.

Current Marketing Budget

First things first, you need to know what you’re spending on your marketing expenses during the course of the year. To really get your hands around the complete picture, you should consider expenses in the following areas:

  • Media Purchases (money spent buying time/space.)
  • Media Production (money spent producing creative for the Media Purchase.)
  • Directory Listings (money spent inserting your business in online and offline/paper directories.)
  • Corporate Identity (money spent on creating your official business identity.)
  • Associations/Organizations (money spent on your professional and civic affiliations.)
  • Charitable Contributions (money spent on visible charitable sponsorships)
  • Marketing Consultants (money spent with consultants/experts on marketing.)

It’s hard to think comprehensively about all the different aspects of marketing that are associated with each of these areas. To that end, we have developed a marketing budget template that we share with clients to help them completely evaluate their current marketing expense level.

This template is available to subscribers of the Finding Brand Blog (look in the right column of the email you are reading this post on for the download) — if you’re not one, it’s OK, you can subscribe and I’ll send you the Marketing Budget Template instantly and FREE of charge. As a member of the Finding Brand community, you’ll receive all the Finding Brand posts in your inbox, so you’ll never miss a post. And of course, you’ll also receive subscriber-only benefits (like this one.)

Determine What Your Marketing Budget Should Be

The question,  “what should be spent on marketing?” is a tough one. And, there is no easy answer. However there are some good guidelines out there. Most commonly the marketing budget is expressed as a percentage of GROSS Income (receipts and gains from all sources less cost of goods sold). The exact percentage that should be spent varies, usually between 3% and 15%. But where on that marketing budget percentage your business should fall is a function of a number of conditions. And this is where it gets a little subjective. Because the marketing budget needs to be set according to a wide variety of factors including: competition, brand recognition, your town/city, number of locations, number of employees, whether you are a B2B or B2C business, selling a service, commodity, or luxury good.

photo credit: Marketing Sherpa
photo credit: Marketing Sherpa

The Houston Chronicle  reported that, “The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin — after all expenses — is in the 10 percent to 12 percent range. Some marketing experts advise that start-up and small businesses usually allocate between 2 and 3 percent of revenue for marketing and advertising, and up to 20 percent if you’re in a competitive industry. Still other marketing experts counsel a range between 1 percent and 10 percent, and even more depending on how long you’ve been in business, competitive activity and what you can afford.”

7 percent is an appropriate place to start for most small to mid-sized businesses. From there, you’ll need to adjust upward for infrequency of purchase. The less often someone makes the buying decision for your specific product or service, the more you have to spend on marketing and advertising. If you have a business that employs less than 100 employees, you will also have to adjust your percentage upward more significantly to compensate for the smaller impact your business has on your community (see the Marketing Sherpa graph to the right for more information.)

We usually see serious small businesses spending 7-12% of their gross income on their marketing budgets annually. Of course, this is often tempered by what the business can afford to spend on their marketing, and as you’ll see on the Marketing Budget Template – it’s not all hard costs, we should account for soft costs (time) in our Marketing Budget.

Leveraging Your Marketing Budget

Once you have determined what you are spending, and what you should be spending, it is time to evaluate where the money is being spent and how it could be more effectively spent. First you have to decide what marketing dollars are helping, and which are stagnating (eliminate those that are stagnating). Be ruthless here, and evaluate whether what you are deploying your marketing budget in strategic/thoughtful campaigns or fits and starts (eliminate the fits and starts in favor of strategy). This will help you to spend smarter and to make better use of your money, time, and energy.

Help with Your Marketing Budget Template

If you need help and ideas about how to build consistency, please check out my blog on the topic. Of course, this is also where a professional marketing consultant can help, and I’d be glad to lend some insights and guidance, please schedule a FREE consultation with me to discuss your unique situation.


If you liked this, you might like...

Tisha Oehmen

Tisha Oehmen is a professional brand strategist and a leader in the branding field. She was recently named a member of the Global Guru’s Top 30 Brand Gurus. She is also the co-founder of Oregon-based Paradux Media Group and the best-selling author of the book, Finding Brand: The Brand Book Tutorial.

Possessing expertise in both front- and back-office operations, Tisha conceptualizes, develops, and implements initiatives to foster brand effectiveness like no other. With over 15 years of experience in branding and marketing, Tisha has successfully led large financial institutions and health care companies down the path of renaming their business.

Where Tisha really shines is in the work that isn’t done. Sometimes a name change for a business isn’t in their best interest and after meeting with Tisha, they are able to find the true value and equity that has always been in their brand. Tisha has a special knack of being able to communicate the value so that the CEO/Business owner can see its luster and then with a little polishing, make it shine company wide.

Tisha is best known for developing long lasting branding campaigns that speak to the heart of the business, the brand, and the community. True brand, no matter how big or small, has longevity. Creating branding campaigns that have longevity, that have a laser-like focus, is where Tisha thrives.

Tisha received her M.B.A. from the University of Oregon, from where she also earned a B.A. in Political Science. She enjoyed a distinguished academic career punctuated by enthusiastic and successful participation in competitive speaking events, and holds numerous awards for her skill in public speaking. Tisha is widely recognized for her ability to capture an audience’s attention with her straightforward and engaging speaking style.

When not working, she enjoys golfing, baking, reading, and hiking with her partner, Mike, and their two dogs, Chloe and Jackson. She’s also an active member of Rotary International, the Chamber of Commerce, and is a very proud supporter of the Oregon Ducks. Tisha lives in Eagle Point, Oregon.

Reader Interactions

Comments

  1. True. Setting a budget will always protect you form overspending. This is most especially essential when doing business. You always need to have spare cash to be able to be ready for unforeseen costs. I have made mistakes in terms of budgeting in the past, that is why I am so keen on doing it now.

Leave a Reply