How to Set a Marketing Budget That Fits Your Business
Forget percentage-of-revenue rules of thumb. Start with your goals, your margins, and the channels that reach your buyers.
The most common budgeting advice — spend 8% of revenue on marketing — is a number invented for a slide deck. It has no relationship to your goals, your margins, or the cost of acquiring a customer in your market. Here's a better way.
Start from the outcome, not the input
Decide how many customers you need to hit your growth target. Divide that by your close rate to get the leads you need. Multiply leads by your cost-per-lead by channel. That's the budget required to hit the number — not a percentage of anything.
Budget for the bottleneck, then expand
Put the first dollars against the one channel most likely to produce qualified demand at a sustainable cost. Once that channel is producing predictably, expand into the next. Spreading a thin budget across six channels produces six underfunded channels.
Reserve for learning
Set aside 15–20% of the budget for testing. New offers, new audiences, new creative. Without a learning reserve, you're forced to keep doing what you've always done — and the market moves without you.
Common questions
What if I don't know my cost-per-lead yet?
Start with a small, measured test spend on one channel. You'll have a real cost-per-lead inside a few weeks, and then you can build a real budget around it.
Should budget change month to month?
Yes. Reallocate toward what's working and away from what isn't on a monthly cadence. A flat budget that never moves is a budget that's slowly going stale.