Ah, the marketing budget! I’ve seen many entrepreneurs (myself included) struggle with this question. Invest too little, and your business stays in the shadows. Spend too much without a strategy, and it’s money down the drain. So, how do you find that sweet spot?
Let me walk you through this thought process that I’ve shared with dozens of entrepreneurs.
1. Defining Your Marketing Goals
remember Mathieu, the founder of a gym. During our first coffee meeting, he told me: “I just want more clients.” But after an hour of discussion, we refined his goals:
- I want to attract 50 new clients within the next 6 months.
- I want to increase brand awareness by 30% on Montreal’s North Shore.
- I want to generate $100,000 in revenue from new memberships.
This clarity has transformed our approach. If you know that each customer costs you around $50 to acquire and you’re aiming for 100 in a quarter, you need at least $5,000. It’s that simple.
2. Using Financial Benchmarks
During a workshop I attended last year, I remember Sophie, the owner of a 15-person SME, asking: “How much do other businesses like mine invest?”
Here’s what experience has taught me:
- Startups in growth mode? Often 10-20% of revenue
- Established SMEs like Sophie’s? Typically 5-10%
- Large corporations? They usually maintain investments above 10%
If you’re just starting out or looking to accelerate growth, don’t hesitate to aim for the higher end of these ranges. I’ve seen too many businesses fail because they weren’t bold enough at this stage.New chat
3. Understanding the Costs of Different Marketing Channels
I often hear clients (especially in e-commerce) ask:
“Realistically, how much does a good Google Ads strategy cost?”
Here’s how I break it down for them:
- Online ads (Google Ads, Meta, etc.): Expect $500 to several thousand per month, depending on your industry. Real estate ads cost a fortune, while fashion is usually cheaper.
- SEO & Content Marketing: It’s a marathon, not a sprint. Good agencies charge 1,500to1,500to5,000 monthly, but results build over time.SEO & Content Marketing: It’s a marathon, not a sprint. Good agencies charge 1,500to1,500to5,000 monthly, but results build over time.
- Email Marketing: Relatively affordable (50to50to500/month) and often highly profitable. Claire, a florist, generated 30% of her annual revenue from a $70/month newsletter.
- PR & Influencers: Costs vary wildly, but budget significantly more if you’re targeting big names.
My advice? Don’t put all your eggs in one basket. The best results I’ve seen come from businesses that diversify their budget wisely.
4. Measuring Return on Investment (ROI)
“I spend $3,000 a month on marketing, but I don’t know if it’s profitable.”With Marc, we set up three simple metrics to track performance:
- Customer Acquisition Cost (CAC): “How much does each new customer cost?”→ For him, it was $18 (if my memory is as sharp as I think!).
- Customer Lifetime Value (LTV): “How much does each customer spend annually?”→ On average, $240 per year.
- Conversion Rate: “What percentage of people reached by campaigns visit?” → 3.2% of those who saw his ads came to dine.
These figures were an eye-opener: every dollar invested generated 13. His budget was not a problem – in fact, it was undersized!
5. Test and Adjust Regularly
I’ve always advocated this approach to my clients: allocate about 20% of your marketing budget to experimentation. Think of this portion as your personal “marketing lab.”
The beauty of this method lies in its flexibility. When you discover a channel that performs exceptionally well, you can gradually shift more resources into it. The surprises in marketing are frequent—often, it’s not the most expensive strategies that generate the best returns.
Without this experimental mindset, you risk missing out on incredible opportunities that your competitors haven’t even spotted yet.
The Right Marketing Budget for Sustainable Growth
The ideal marketing budget is one that helps you achieve your goals while maintaining a positive return. It’s a delicate balance—but not a mysterious one.
Having guided dozens of entrepreneurs through this process, I’ve observed the same truth time and again: It’s not about the size of the budget, but its relevance and smart allocation.
Still unsure about your marketing strategy? Need an outside perspective to optimize your budget? Let’s discuss it—I’d be happy to help!
