How Much Should I Spend on Marketing and Advertising?

How Much Should I Spend on Marketing and Advertising?

One of the hardest things for entrepreneurs and small business owners to wrap their heads around when it comes to marketing and advertising their business is what they should be spending on those activities.

We have these discussions constantly when working with clients on new marketing initiatives.

They go something like this:

  • “What’s your marketing budget?”
  • “We don’t have one.”
  • “Ok, well how much do you typically spend on marketing each year?”
  • “We don’t do a lot of it and don’t really know how much we spend right now.”
  • “Ok, so what do you think you could allocate to marketing this year and what would you need to get in return from that investment?”
  • “We’re not really sure, can you just tell us how much your services cost?”

The problem is, it’s very difficult to propose anything without any idea of where to start. That starting point has to be either a marketing and advertising budget or a set of goals you’re looking to accomplish.

Without either of those, we’re all just throwing darts at a wall, and that’s no way to run a business!

Listen to the episode on Apple Podcasts, Spotify, Overcast, Google Podcasts, watch it on YouTube, or search for The Messengers on your favorite podcast platform.

Or stream the episode here:

Show Notes:

[08:16] Podcast Episodes About Tracking Marketing Activities

[08:30] Making Informed Decisions Based on Data

[11:15] - Chris discusses how he got into marketing from his experiences starting his first business.

[12:00] Recommended reading for anyone thinking about starting a business because they’re really good at something: The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It

[12:35] - We talk actual budget numbers you can apply to any business as a good starting point.

[22:00] & [26:10] - Discussion of what expenses should be included as part of your marketing budget, how to calculate them effectively, and how to properly allocate those to the categories in your budgets.

[23:45] - Conversation about the costs of outsourcing vs insourcing and how to strategically use outsourcing as an inexpensive alternative to free up you or your staff to focus on activities with a greater ROI.