Your marketing plan and budget go hand-in-hand, so make sure you have a plan that provides measurable solutions for your needs. There is no set formula across the board, as each company has its own needs.
The goal of the marketing budget is to plan expenses and predict revenue. The average amount allocated to marketing budgets is between two and five percent of gross sales. Keep in mind this does not represent individual needs or strategies, so you might end up budgeting more. Other factors can determine your marketing budget, like:
- Percent of projected or past gross sales
- Per unit sales
- Seasonal allocation (especially true for retail operations)
- Projected cash flow
Dust off those old ledgers and compare current and past data to see how much you’ve allocated in the past and the success of each endeavor. If you don’t have past data, be proactive in recording and measuring your marketing efforts now for future comparisons.