Starting a business is an exciting journey. But it can also be a challenging one, especially when it comes to managing your finances. As a startup founder, one of the biggest questions you may have is how to allocate and manage your marketing budget. With so many options available, it’s hard to decide where to spend your money to get the best return on investment.
Don’t worry, as you’re not alone in this. Many startup founders are in the same situation, wondering how to spread their limited budget to achieve ambitious business goals.
This post gives a closer look at how to allocate and manage your startup marketing budget. Read on for practical tips and strategies to help you make smarter marketing decisions, stay on budget, and, ultimately, grow your business.
Where to Start With the Startup Marketing Budget?
If we look at best practices, we’ll see two essential points to consider when deciding on your marketing budget:
- Understand your estimated or gross annual revenue. Then allocate a percent of it toward your marketing budget.
- Take into account the age of your company. Newer companies should budget more toward marketing to accelerate growth.
The amount companies should invest in marketing depends on their age and market positions. New players should spend around 20% of their gross revenue, while mature businesses may reduce it to 10%.
We at Glorium Marketing use two main criteria – the return on investment (ROI) and lifetime value (LTV) while estimating the budget needs. It allows us to build our evaluations on predictable results and amend them when needed.
Once you’ve established your budget, you’d want to decide where to spend it. The marketing mix will depend on your strategies, market specifics, the amount your executives are ready to invest, and the software and subscriptions needed to do your job.
Let’s take a closer look at how to allocate and manage your startup’s marketing budget.
How to Determine Your Startup Marketing Budget?
Таkе а strategic approach to budgeting to make the most of your marketing dollars and achieve your desired results. To understand how much you need to invest in promotion, consider your overall business goals, your target audience, and the strategies and tools to reach them.
- Staff Salaries: includes the salaries of all full-time and part-time marketing staff members, with added benefits, bonuses, and other compensation. This significant part covers hiring and retaining the talent necessary to execute marketing strategies and campaigns.
- SaaS Marketing Budget: includes the cost of marketing software subscriptions, such as email marketing tools, social media management aggregators, and analytics platforms. These essential tools help marketers automate and optimize their campaigns, so startups can save time and resources while increasing efficiency and effectiveness.
- Typical Marketing Campaign Costs: spending on marketing campaigns, such as advertising, public relations, and events. Think about the cost of creating and distributing content, running social media ads, and organizing promotional gigs. These can vary depending on the type and scope of the campaign, but they are typically a bulk part of a startup’s marketing budget. Essential for reaching and engaging potential customers and building brand awareness.
Above are just a few examples of the categories that may make up a startup’s marketing budget, as each startup will have unique needs and priorities.
Here are some tips to make your marketing budget efficient:
- Choose your marketing costs wisely by determining what is needed and what you can delay cutting costs.
- Embrace analytics to optimize the budget. Use tracking tools to control spending, traffic, conversion, and leads.
- Carefully assess new marketing strategies before investing money; evaluate how they will bring profits.
- Use networking to save on advertising costs – attend free events and join digital communities.
- Update your budget regularly, especially with strategic shifts in the business or market.
- Integrate data with Salesforce or Quickbooks accounts to automate internal workflow and serve customers faster.