When proposing potential ads at your startup, one of the first questions you\u2019ll likely encounter is, \u201cHow much will this cost?\u201d If you\u2019ve prepared a killer startup marketing budget, you will be well-equipped to help executives understand and buy into your vision.<\/p>\n
<\/a><\/p>\n A marketing budget should detail how much you\u2019ll spend on paid advertising, fit into your overall strategy<\/a>, and prove a worthy expenditure based on revenue earned.<\/p>\n In a world where 82% of startups fail from cash flow problems<\/a>, the stakes are higher for these new businesses. Startups often face limited resources and smaller budgets, making it difficult to stake claim to a marketing budget.<\/p>\n This post covers how to determine what your marketing budget should be and what it needs to include.<\/p>\n Table of Contents<\/strong><\/p>\n Marketing Costs for a Startup<\/a> <\/a> <\/p>\n When your company is new, determining an initial marketing budget can be confusing. In some cases, budget decisions are top-down, inspired by competitors, or made by setting a goal.<\/p>\n If this isn\u2019t the case for your startup\u2019s operations, focus first on what will bring in the most revenue. Revenue determines what your marketing budget should be and where funds should be allocated.<\/p>\n<\/p>\n The money gained from your gross revenue should fund your marketing budget. So, how much of your gross revenue will you need? The average marketing budget for startups should be 11.2% of overall revenue. <\/a>This percentage gives marketers enough resources to build brand awareness and start attracting leads.<\/p>\n If you\u2019re starting your budget from scratch, consider using a marketing budget template<\/a> to outline your phase one marketing activities and costs.<\/p>\n<\/p>\n Download Free Marketing Budget Templates<\/a><\/p>\n<\/p>\n To identify your gross revenue, calculate your total number of sales\/increases.<\/p>\n If you don’t have a gross revenue estimate yet, determine how much you are projecting to make and use those numbers as benchmarks. Explore tools to help you estimate your gross revenue, like this online calculator from the Small Business Association<\/a>.<\/p>\n Now that you understand the first step to making a budget, explore other potential needs you may have.<\/p>\n<\/p>\n <\/a> <\/p>\n So, what do you need to include in your budget?<\/p>\n Once you have money earmarked, you can begin breaking down the costs. Think of what costs naturally occur in your day-to-day and what resources you’ll need to make your marketing happen.<\/p>\n You can put this information in a spreadsheet or template, <\/a>like these free marketing offerings from HubSpot.<\/a>There are no real rules with budget design, as long as it’s comprehensible and detailed enough to be useful.<\/p>\n Remember to consider the following expenses, such as:<\/p>\n Technology. <\/strong>When you are creating campaigns, factor in the technology you need to use, such as software to build a product page or manage a drip program<\/a>. There are lots of marketing tools at different price points (and even free software), so be sure to write out what software you\u2019ll need to buy. Check out this blog <\/a>to determine which products fit your budget. Working from your business goals helps you make guided budgeting decisions. For example, if your company\u2019s goal is to increase brand awareness, you’ll probably want to devote most of your budget to branding, content marketing, and paid advertising.<\/p>\n Remember that you can play around with free methods for most of these costs. For example, if you are certain that automated software will help your startup, explore free trials or free services that you can use to determine what\u2019s worth the cost.<\/p>\n <\/a> <\/p>\n Before writing your startup marketing budget, consider the following tips.<\/p>\n Startups have limited resources and need quick wins. Your first goal should always be to get leads for sales. Before committing to an expenditure, ask yourself, \u201cHow does this empower sales?\u201d If the answer isn\u2019t obvious, it\u2019s likely not worth the money.<\/p>\n Check out your main competitors\u2019 websites and blogs. What articles are they writing about? What keywords are they targeting? And, ultimately, how can you improve upon their strategy?<\/p>\n Remember that SEO is a long game, and you likely won\u2019t see immediate wins. However, you should optimize your articles from the beginning to create the right SEO foundation.<\/p>\n There\u2019s a reason why your customers chose you. Understanding their buyers\u2019 journeys is valuable information. This knowledge can help you determine which channels are effective and worth budgeting for.<\/p>\n You will be accountable for how your marketing budget is spent. Make sure you keep track of the leads you gather and the revenue that can be attributed to marketing.<\/p>\n When you need to report your ROI at the end of the year, you\u2019ll already have data at your fingertips.<\/p>\n Between inflation and economic changes, your budget will almost certainly need an annual review.<\/p>\n In fact, 48% of marketers predict their budget will increase in 2023, according to HubSpot Research. Whether your budget grows or shrinks, you should be ready to make adjustments.<\/p>\n <\/a> <\/p>\n As a marketing leader, you must set a budget and determine how the money will be spent. This step-by-step guide shares how you can write a clear, concise marketing budget for your startup.<\/p>\n<\/p>\n Image Source<\/a><\/em><\/p>\n Remember, startups typically need to allocate 11% of their revenue<\/a>(before taxes) to marketing in order to grow. So deciding your budget is as easy as determining 11 percent of your gross revenue, right?<\/p>\n Maybe, but your marketing budget likely needs executive approval. Plus, you\u2019ll want to back up your budgetary decisions with statistics and a solid plan.<\/p>\n Once you’ve identified your overall plan, you can get a ballpark budget estimate. As a guide, think about your business and campaign goals. From those goals, choose the areas you want to invest the most in.<\/p>\n
\n Startup Marketing Budget Considerations<\/a>
\n Tips for Writing a Startup Marketing Budget<\/a>
\n How to Write a Startup Marketing Budget<\/a> <\/p>\nMarketing Costs for a Startup<\/h2>\n
Startup Marketing Budget Considerations<\/h2>\n
\n Research. <\/strong>If you haven’t yet discovered your target audience, you may need to invest in market research. Read the section \u201cHow to Write a Startup Marketing Budget\u201d below for more info on market research.
\n Automation. <\/strong>Services that automate marketing processes can make your life much easier. They can also be advantageous to startups that don’t have the resources to spend money on extra hands to complete projects.
\n Production. <\/strong>If you need content pieces, product or advertisement videos, or pictures, you will want to budget for these items as well. Instead of paying for multiple different services, you could hire freelancers <\/a>to fill these roles.
\n Paid advertising. <\/strong>Are you planning to run ads on TV, radio, or online? This is the category where you factor in those costs. It\u2019s easy for paid advertising to add up, with some startups spending as much as 20% of their yearly budget <\/a>on advertising alone. Remember, you can estimate the cost of paid ads. Take a look at our advertising guide <\/a>to explore prices on anything from PPC ads to social media ads.
\n Branding. <\/strong>Assets that build a first impression directly impact your branding. This might include business cards, billboards, swag, and signs.
\n Content marketing. <\/strong>Decide how much you’re going to allocate to deliverable content. Consider automation services, like<\/a>HubSpot<\/a>or<\/a>Sprout Social<\/a>, and content ideas you can produce organically for free.
\n Traditional advertising. <\/strong>If applicable to your business, make traditional advertising a line item. Paid advertising usually occurs online, but traditional advertising refers to advertisements such as print and billboards.
\n New employees. <\/strong>If you plan on growing your team with full-time or part-time staff, you will likely need to include their costs in your marketing budget.
\n Unexpected costs. <\/strong>Expect the unexpected when figuring out your budget. Plan for devices to break or campaigns to take longer than you think they will, generating higher costs. <\/p>\nTips for Writing a Startup Marketing Budget<\/h2>\n
1. Check that investments are worthwhile.<\/h3>\n
2. Do competitor research.<\/h3>\n
3. Understand your customer\u2019s journey.<\/a><\/h3>\n
4. Prepare to report on your ROI (return on investment).<\/h3>\n
5. Review your marketing budget yearly.<\/h3>\n
How to Write a Startup Marketing Budget<\/h2>\n
1. Calculate your revenue, and determine your budget.<\/h3>\n
2. Conduct market research.<\/h3>\n