Average Marketing Budget for Small Business
The marketing budget is a fluid, flexible budget that should be changed and adjusted frequently to ensure the business can always remain competitive in its industry. Most importantly, all marketing budgets, including small businesses, should be implemented into the business plan right from inception.
For example, a small yet high-end men’s clothier could allocate at least 5-10% of its adjusted gross income on marketing, especially in the beginning. This amount usually fluctuates depending on how active and effective their marketing plan is. A small clothing store that only offers service to local customers could get by with $500 – $750 a month for advertising costs.
Marketing experts and agencies often recommend that small businesses spend anywhere from 7-8 percent of their gross revenue on marketing. And according to a study, small companies tend to follow this rule, spending around 3-5 percent.
How much do clothing brands spend on marketing?
In a survey of representatives of the apparel and accessory stores industry in the United States, it was found that in 2020 the sector spent 708.49 million U.S. dollars on advertising. In the year prior, the industry’s ad expenditures amounted to 847 million dollars.
How should a small business plan a marketing budget?
- Know Your Sales Funnel
- Know Your Operational Costs
- Set Your Marketing Budget Based on Business Goals
- Position Marketing as an Investment, Not a Cost
- Consider Your Growth Stage
- Understand Current and Future Trends
What is a good marketing budget for a small business?
A small business just starting should budget anywhere between $500 and $2,000 a month for its marketing initiatives. This amount could increase depending on how far the owner wants their company to go. This also does not include website development, printing costs, sales tools, etc.
The marketing budget is usually the first cost that a new business owner must consider when starting out in business. For example, an entrepreneur might want to open a boutique store as their first location. They know they need to invest a decent amount in marketing alone, especially if their location is not prime real estate.
How many types of marketing tools are there?
Traditional media – such as billboards, banners, newspapers, magazines, television, radio, and telephone directories – involve marketing tools such as paid print advertisements, commercials, and news releases. This approach focuses on a one-way sales push and relies on reaching high numbers of people to ensure success.
Marketing budgets are usually made up of promotional costs, advertising costs, marketing research, the cost to produce the marketing materials and collateral, event costs, and travel costs.
Common marketing tools may include:
- Print advertising
- Digital marketing
- Search engine optimization (SEO)
- Social media marketing (SMM)
- Press releases (PR)
- Commercial advertising
- Customer loyalty programs
- Brand reputation management
For example, a typical promotional cost would be the money used to buy samples of your product or service to pass out to potential customers. Marketing research is another good example; this could include hiring an independent company to conduct market research on your ideal customer base, or it could mean having some participants complete surveys at your place of business.
The marketing budget for a small business should be fluid and flexible because, as previously mentioned, it is not uncommon for them to change and fluctuate depending on the company’s needs. This is another reason entrepreneurs should include their marketing budgets into their overall business plans from day one rather than waiting to create the first one when the time comes…which is before you open the “doors”!