What Should My Marketing Budget Be?
After seven years of Formada and an even longer career in marketing, it’s no surprise that I’ve been asked this question a lot.
The common wisdom for a number of years was that any business should invest between 2% and 5% of their total revenue into its marketing budget, but the common wisdom changes almost as rapidly as marketing technology seems to.
When you dig into the numbers, you find that marketing investments vary wildly by industry. Tech companies, on average, spend about 10–15% of their revenue, whereas retail organizations invest about 4–6% of their revenue into marketing, and the automotive industry only spends about 2–4%.
But what if you’re a startup?
What if your business isn’t profitable and you can’t even pay yourself a comfortable salary?
What should your marketing budget look like in this instance?
My answer: Nothing.
I know that probably sounds misguided to some of you, and probably sounds especially foolish coming from someone who co-owns a marketing agency, but I’m dead serious.
Your marketing budget should be $0 if your business isn’t profitable yet and you’re not paying yourself a comfortable salary. Full stop.
Why Investing In Yourself Is Investing In The Business
My advice instead, dear startup owner, would be for you to invest in yourself. Why? Because you’re entering the fight of your life, and if you want to turn this dream into a reality, then you’re gonna need the mental, physical, and emotional resilience necessary to see it through.
The early years of entrepreneurship are brutal, and the best ROI is showing up stronger, clearer, and more driven than you were the day before. If you aren’t ready, your business won’t be either.
Therapy.
A personal trainer.
A coach or peer group.
These three things, in my opinion, have been invaluable in my ability to be the sort of person I want to be while building a thriving business.
As a new business owner, you’re going to have a lot of feelings — some rational, some not — and seeing a therapist has given me a neutral place where I can share, examine, and make sense of those feelings in a healthy way. This keeps me focused on what really matters, so when I show up, I can be a better leader to my team.
My husband is the sort of person who is self-motivated to run and workout at home. I am not that person. Seeing a trainer holds me to a higher level of accountability than I am able to hold myself. I’m physically stronger, have more energy, and am mentally clearer than I’ve ever been before. Owning a business is a never-ending test of your endurance. You need to be prepared.
I’m lucky in that I’ve been able to surround myself with mentors, joined women’s entrepreneurial groups, and have created a community of like-minded folks who all give me invaluable insights about life and business. They remind me that what I’m building matters. That I’m providing people value. That I’m not alone in this experience. They inspire me to keep showing up.
You Don’t Need A Marketing Budget To Tell Your Story
Sometimes, being in the early stages of startup life can feel absolutely terrifying. There’s always a new challenge to face. There’s always someone telling you that you can quit and “just get a regular job.” But you and I both know that’s not the right answer.
And while you’re investing in yourself in order to make yourself and the business stronger, remember this: Social media is free.
Tell your story. Write blogs. Make videos. Start a podcast. Get comfortable telling the world more about yourself and your business.
Don’t be afraid that things aren’t perfect right away. Just get started. This is how you develop a brand story. This is how you can connect with people. All on a marketing budget of $0.00.
If you’d like to learn more about Formada and our services, please contact me today. I’d love to meet with you!