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How to Create a Small Business Marketing Budget (With Free Templates)

Rieva Lesonsky

Rieva Lesonsky

Contributor at Fundera
Rieva Lesonsky is a small business contributor for Fundera and CEO of GrowBiz Media, a media company. She has spent 30+ years covering, consulting and speaking to small businesses owners and entrepreneurs.
Rieva Lesonsky

Developing a small business marketing budget is a critical step in any marketing plan. Without one, you’ll run the risk of over- or under-spending on marketing—and seeing an impact on your bottom line.

Coming Up with a Small Business Marketing Budget

Every small business must invest in marketing in order to grow. But how much should you spend on marketing, and what should you spend it on?

These questions can be tough to answer for new small business owners with no previous experience in creating a small business marketing budget.

The following steps will help startup entrepreneurs and other novices devise a small business marketing budget that works.

1. Start with a marketing plan.

Your marketing plan is the what, why, and how of your marketing. It outlines your overall strategy and the tactics you’ll use to hit your goals (more on goals in the next step).

Your marketing plan (which should be part of your business plan) details how you will market your business to attract your target customer base. Oftentimes, this is also where you’ll define your target customer. Your marketing plan includes the marketing channels you will use (social media, online advertising, print advertising, etc.), along with specific tactics and cadence.

2. Set goals for your marketing.

What do you want to achieve? Pinpointing your goals will help you determine where you need to put most of your budget. Once you’ve set your goals, you can backtrack to assign tactics and budget to the goal. For example, as a new business, you need to focus on marketing tactics that generate brand awareness to help build buzz around your business.

4. Calculate your total small business marketing budget for the year.

There’s no hard and fast rule as to how much money a business should budget for marketing. It depends on your industry, stage in business, profit margins, and annual sales. Know this:

  • Many businesses base their marketing on a percentage of their gross revenues. The benefit of this approach is that your small business marketing budget will rise along with your sales. However, keep in mind that marketing generates sales—not the other way around. That means a startup business needs to budget a disproportionate percentage for marketing compared to its sales.
  • To calculate your marketing budget, look at your sales projections for your first year in business. (This should be part of your business plan.) Industry organizations, trade associations, publications, and websites will have benchmark information about the average marketing budget in your industry.

Small Business Marketing Budgets Are Up

Overall, businesses are spending more on marketing. Last year, the average marketing budget increased for the third year in a row, according to the Gartner 2016-2017 CMO Spend Survey. The average business in the survey (which included both B2C and B2B companies) spent 11% of its total budget and 7.5% of its total revenues on marketing and advertising.

Once you’ve estimated your annual marketing budget, use your marketing plan to fine-tune it. Be realistic: If your budget isn’t large enough to cover all the elements of the marketing plan you had in mind, look for ways to do more with less. For example, could you run fewer paid ads and focus on free marketing like organic social media or organic SEO?


Of course, even “free” marketing tactics have time costs associated with them. Creating social media posts, monitoring them and responding to social media followers, for example, can take hours a day. Paid marketing and advertising tactics might have a better ROI than free tactics—even when you factor in their cost.

Speaking of ROI, you must monitor the results you get from your marketing efforts. This is easier than ever to do, thanks to analytics tools that track the performance of your website, your social media posts, and your marketing emails. As you see which types of marketing work best for your business, you can adjust your marketing budget to focus more of your investment where it will get the best results.

Now that you’ve created a marketing budget, commit to it. Many new business owners get nervous and pull back on marketing the minute their sales dwindle even a little. That’s the worst thing you can do: After all, marketing is what grows your sales.

Where to Find Free Budgeting Templates

Need help crafting your small business marketing budget? Try these free, downloadable templates.

(Disclosure: SCORE is a client of my company.)

Now that you have everything you need to build your small business marketing budget—take advantage of it! Without marketing, it will be hard to scale your business. A budget will help you to spend wisely as you build up your business.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.
Rieva Lesonsky

Rieva Lesonsky

Contributor at Fundera
Rieva Lesonsky is a small business contributor for Fundera and CEO of GrowBiz Media, a media company. She has spent 30+ years covering, consulting and speaking to small businesses owners and entrepreneurs.
Rieva Lesonsky

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