Small business – How much should I spend on marketing?
dollar sign
Small business
How much should I spend on marketing?

Being a small business owner is often a solitary occupation and it can be hard to gain perspective on your decisions. One of the more difficult decisions is how much to spend on marketing.

The decision is hard because the return on marketing spend is often unclear, which leaves it very difficult for business owners to understand the value of their marketing. The inevitable result is that business owners put marketing in the too hard basket and miss out on the potentially huge benefits that effective marketing can deliver.

So how can you change your approach to marketing?

The first step towards improving a business’s marketing is to work out how much to spend. What’s the best way to do this? Anthony D’Arrigo, the managing Partner at RDC Partners, sheds some light on this great unknown. Using the many successful businesses he’s worked with over his career as benchmarks, Anthony suggests the following guideline:

  • 2% of turnover.

For example, if a business made $300,000 in sales during the last financial year, it should look to spend around $6,000 on marketing.

Of course, how the money is spent is crucial. But having some guidance from other successful small businesses as to how much to spend is critical in empowering business owners to confidently take the first (and hence most important) step in their marketing efforts.

In later articles we will look at ways to measure marketing efforts, which can help business owners to see value in their marketing expenses and even to view marketing as an investment rather than an expense.

To gain better insight into your marketing spend, sign up for a free consultation with us by filling in the form below.