Lately, I’ve been having deep dives into finances with my strategy clients — specifically around marketing budgets. Most of them understand that marketing is necessary, but the big questions are always the same: When should I start spending? And how much is enough?

Let’s knock out the first question right away: you should start investing in marketing as early as possible. As for how much to spend… well, here comes the classic consultant answer — it depends.

But hang tight — I’m going to walk you through the exact framework I use with my clients to figure it out. By the end of this post, you’ll be able to set a smart, strategic marketing budget that actually moves the needle.

First Things First: What Counts as Marketing Spend?

You may think you’re not spending anything on marketing — especially if you’re not running ads — but chances are, you absolutely are.

Marketing isn’t just flashy Facebook ads or billboards in Times Square. It’s every tool, platform, and person you rely on to get your brand out there.

Let’s break it down:

Tools & Tech

Think about everything that helps power your marketing engine:

• Your email marketing platform (I use Kit)

• Paid social media tools and features (yes, even those LinkedIn premium subscriptions)

• Web hosting (I’m on Bluehost)

• CRM systems, analytics dashboards, scheduling tools — the works

Note: Some of these are affiliate links, which means I may earn a commission if you choose to sign up — at no cost to you.

People

Whether it’s your in-house team or a group of freelancers, people make the marketing magic happen:

• Graphic and web designers

• Copywriters, ghostwriters, and content creators

• Marketing consultants and strategists

• Agencies and project-based experts

Even if you’re a one-person show, the tools you use are doing the heavy lifting — and that’s a form of investment, too. So yes, everyone is spending on marketing. The question is: are you spending enough to grow?

General Guidelines for Marketing Budgets

Let’s talk numbers. Here’s what businesses across the board are spending on marketing, based on revenue:

• B2B companies: Typically 2–5%

• B2C companies: Closer to 10%

• Average in 2021: 6.4% of revenue

• Average in 2023: 9.1% of revenue

These numbers are shifting upward as marketing becomes more competitive and digital channels become increasingly pay-to-play. Here’s a peek at average spend by industry (from Deloitte’s CMO Survey):

• Banking & Finance: 9.5%

• Media & Communications: 14.3%

• Consumer Goods: 25.2%

• Professional Services: 7.1%

• Service Consulting: 21%

• Software/Tech: 11.8%

But remember: averages don’t tell your whole story. You need a budget that fits your stage of business and growth goals.

How to Budget for Marketing (Based on Business Stage)

Here’s a high-level look at how I help clients figure out how much to allocate based on where they are in their business journey.

 Launch Phase: Just Getting Started

If you’re building from the ground up, start by covering the basics — infrastructure like your website, email list, social media setup, and branding assets. That alone can often be done for less than $300/month (not including staff).

I recommend setting aside about 20% of your total startup budget for marketing. This covers strategy help, freelancers, and early visibility.

Stabilization Phase: Steady Revenue, Solid Systems

Now you’re in a groove. Revenue is reliable, and you’re not scrambling to prove your concept anymore.

This is the time to:

• Build loyalty and retention strategies

• Revisit your branding (what worked when you started might not reflect who you are now)

• Strengthen what’s working before you add new channels

Your budget here should land around 10% of revenue or 20% of profit, depending on your margins.

Growth Phase: Scaling Up

This is your green-light moment — you’re ready to expand.

Growth demands a bigger investment. This is when your marketing budget should stretch the furthest. Here are a few benchmarks to play with:

• 20% of revenue

• 40% of profit

• Or: 50–60% of your recent profit gains, especially if marketing was the driver behind that growth

Let’s say you started running Meta ads in February and they brought in an extra $3,000/month. You could allocate $1,500–$1,800 of that toward reinvesting in what’s working, either by increasing your ad spend or expanding to new channels.

Crafting a Budget That Actually Reflects Your Business

Here’s the truth: No two businesses have identical budgets. Some years you can go big with a brand refresh, new hires, and a full-funnel ad strategy. Other years, you’re scrappy and making it work with limited resources.

Especially in solo ventures, the line between business and personal income is blurry. Deciding whether to invest in marketing or finally take that overdue vacation? That’s a tough one.

But when it comes to setting your marketing budget, here’s where to start:

Your Goals Drive Your Spend

If you don’t have a documented strategy, you’ll end up chasing trends instead of building traction. Set your goals, define your metrics, and then ask the magic question:

What will it actually take to reach those goals?

Here’s how to find that answer:

• Analyze your competitors: What assets and platforms are they using? What gaps can you fill with your own spin?

• Study your market: Is demand growing or shrinking? Are there new opportunities (like grants or emerging platforms) you can tap into?

Reverse-Engineer Your Budget From the Results You Want

Start with your goal — for example, a 20% revenue boost this year. Work backward:

• What’s your current conversion rate?

• How many leads or site visitors do you need to hit your revenue target?

• Where does your audience spend time? (This tells you where to focus your efforts)

• How much will you need to spend across those platforms — including people, tools, and ad budgets?

One common mistake I see: trying to grow inside a market that’s too small. If your audience is limited, you’ll hit a wall no matter how much you spend. Broaden your reach or diversify your channels if you’re running out of runway.

Pro tip: Use this TAM to SOM breakdown to calculate the size of your reachable market.

When to Avoid Cutting Your Marketing Budget

If economic uncertainty has you feeling anxious, you’re not alone. I predicted a rocky road post-2024 election, and unfortunately, it seems like that call was spot on.

In tough times, the knee-jerk reaction is to slash marketing spend. But that’s often a mistake. When your audience is more cautious with their money, you need to work harder to earn their trust and attention — not pull back.

If you’re going to cut, cut what’s not working — not everything. The brands that keep showing up are the ones people remember when they’re ready to spend again.

Final Thoughts

There’s no one-size-fits-all answer when it comes to how much you should spend on marketing — but there is a right way to figure it out.

Know your stage. Get clear on your goals. Reverse-engineer your plan. And don’t let fear or comparison keep you from investing wisely in the one thing that keeps your business growing: visibility.

Will

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