Thursday, June 11, 2015

How Much to Invest in Marketing?

A question that often comes up is, as a small business, how much should I allocate on a marketing? Although opinions vary, I think this fairly straightforward explanation from a SBA.GOV blog post is provides some insight:

"Many businesses allocate a percentage of actual or projected gross revenues – usually between 2-3 percent for run-rate marketing and up to 3-5 percent for start-up marketing. But the allocation actually depends on several factors: the industry you’re in, the size of your business, and its growth stage. For example, during the early brand building years retail businesses spend much more than other businesses on marketing – up to 20 percent of sales."

"As a general rule, small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing. This budget should be split between 1) brand development costs (which includes all the channels you use to promote your brand such as your website, blogs, sales collateral, etc.), and 2) the costs of promoting your business (campaigns, advertising, events, etc.)."

Bill McGuire is principal of W.M.McGuire, a full service marketing firm serving the Registered Investment Advisor (RIA) community. We help businesses grow by applying common-sense marketing with a keen eye towards your budgets, deadlines and results. Let us help you with your marketing plan, contact by email or (973) 216-4152

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