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  • Writer's pictureBrian Grinonneau

How Much to Spend on Marketing/Advertising?


How much you should be spending on marketing? The answer is not simple as there is no set rule or formula for determining how much a business should allocate to marketing. However, there are some guidelines that can help you make an informed decision about how much to spend.


Before deciding on a budget, it is essential to consider your business's size, industry, competition, and target audience. Larger businesses may need to spend more on marketing to stay ahead of their competitors, while smaller businesses may be able to get by with a smaller budget.


Here are some key factors to consider when determining your marketing budget:

  1. Revenue and profit margins: The amount of money you make from your business and your profit margins should be the starting point for determining your marketing budget. In general, businesses should allocate between 5% and 10% of their revenue to marketing.

  2. Industry benchmarks: Look at what other businesses in your industry are spending on marketing. This can give you a benchmark to work from and help you determine whether you are over or underinvesting in marketing.

  3. Growth goals: If your business is looking to grow rapidly, you may need to allocate a larger budget to marketing to achieve your goals. However, if you are happy with steady growth, you may be able to get by with a smaller budget.

  4. Customer acquisition cost: It is important to consider how much it costs to acquire a new customer. If your customer acquisition cost is high, you may need to spend more on marketing to acquire new customers.

  5. Return on investment: Finally, it is crucial to consider the return on investment (ROI) of your marketing efforts. You want to make sure that the money you are spending on marketing is generating a positive ROI.

There is no set rule for how much a local business should spend on marketing. It depends on various factors such as revenue, profit margins, industry benchmarks, growth goals, customer acquisition costs, and ROI. The most important thing is to allocate a budget that is sustainable for your business and generates a positive ROI.

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