Smart Marketing Budget for A Small Business (with Free Marketing Strategies)

Every startup business should invest in marketing to promote their products or services. But a vital question arises here! How much should you spend on the marketing budget for a small business?

Often, startups and small business owners feel a dilemma to initiate their marketing plans. Moreover, they can’t determine how much they should expend on marketing their products or how it will impact their revenue.

As a result, they spend money carelessly and fail to prioritize the spending due to the lack of a smart marketing budget.

Since budgeting helps entrepreneurs to create spending plan, track their expenditure, distribute the resources, organize the future investment and keep out of debt. Hence, it ensures the best use of your money.

During launching a new business you have thousand of works in your hand to manage. One of these important tasks is developing an effective marketing plan that fits your business goal.

Furthermore, you have to distribute the resources and prioritize the to-do lists minimizing the wastage of your total expense. In short, you need to generate an effective spending plan in order to keep you and your team members focused on the goal.

This article focus on the basic factors you should consider before calculating your marketing budget for the first 1 year based on the specific business niche and suggest some effective yet free online marketing strategy to imply.

You can check the ultimate Budgeting Guide For Small Business in order to simplify your marketing plan. Regardless, let dive in to explore productive marketing tactics for small business.

Why Marketing Budget is Important at The Very Beginning of Your Business

You cant abandon the promotion activities for your business even if you are a local startup business owner. Because Marketing is the way to tell people about your business and its benefits.


However, often people get confused to pick the right marketing plan for them that is effective for their business and fits their budget as well.

Potent marketing budget plan ensures your financial security.

Luckily! with the boon of modern advancement, it becomes easy to frame effective spending plans based on your business category and company goal. Furthermore, it let you attract potential customers and drive traffic to increase your sales dramatically with the minimum cost.

You will get the maximum output with the minimum input if you proceed in a well-planned and systematic way.

That’s why it is important to scale your marketing budget while planning for your business structure and configuring the working process. Otherwise, your organization cannot keep pace with the other competitors in the long run.

How to Create an Effective Marketing Budget For a Small Business


In order to bring out the best output from your minimum expense, you must know where to spend your marketing bulks.

According to the rule of thumb to hold the current position or get a little exposure, a company should spend around 5 percent of its total revenue on marketing. On the other hand, for a better and vast expansion this percentage should be raised around 10 percent of the revenue.

However, this expenditure may vary with the company type and market size. For highly competitive industries you may spend a higher percentage of your marketing outlay.

Here are the six steps to generate a marketing budget as part of your marketing plan:

  • Market Analysis of Your Business
  • Research Your Customers
  • Set Your Sale’s Funnel
  • Set The Budget Based on Business Goals
  • Make Effective Spending Decisions
  • Utilize Best Practices

Market Analysis of Your Business

To calculate the marketing budget of your startup business at first you have to analyze your niche market condition and existing competitors. It will help you to set your company goal and other growth hacking strategies for startups.

In general, the marketing budget should be a particular portion of business revenue. Usually, B2B companies should spend around 2 to 5% of their revenue and it’s a marketing expense thumb rule.

In comparison, the marketing budget for a B2C company is higher for 5 to 10% than a B2B company. The excess investment for various marketing channels is responsible for the extra budget.

According to market research by BDC, the small business has employees in between 20-49 spend around $30,000 in a year for marketing in Canada. While the budget goes up to $100,000 for the company having 50 plus employees.

You can reduce the marketing budget by clustering the common elements in your industry and your competitor’s interest.

Research Your Customers


After defining your company goal and analyzing the competitors your next duty is to find out the proper way to reach your target audience.

It means you have to take a local approach and try to assess the market around your business to ensure desired leads. Based on the demographical area and buyer’s behavior your marketing tactics will be different and the budget as well. Moreover, for social media marketing, you need to find the preferable channels of your potent audience. Then you have to target those platforms to promote your business and upfront the conversion rate.

Therefore, your marketing budget will vary due to your buyer’s personal choice, personality, geographical area, age, income range, and other circumstances.

Set Your Sale’s Funnel

In this stage, you have to decide the actions to convert a stranger into your loyal advisor. You have to define all the promotional activities for the journey of your potential customers to go through on the way to purchase.

Creating a sales funnel is very effective in generating sales. For small or startup companies the four-step sales funnel is the most effective and budget-friendly method. The AIDA (Awareness, Interest, Decision, and Action) represents the complete mindset of the customer.

With the expansion of your business, you may need some adjustment for your sales funnel. However, the effectiveness of the sales funnel for your business is measured by tracking the conversion rate of your customers.

Set The Budget Based on Business Goals

The business goal must be specific and measurable. You should set a goal to improve your site traffic, generate more sales and increase the revenue. It should be the percentage of people who feel interested in your offers. Finally, how many conversions you need from the visitors.

Once you’ve defined your budget and put your plan into action review it on a consistent basis to analyze whether your spending is achieving the goals you set.

Jessica Horvath, BDC Business Consultant

If you need a higher number of visitors in a month convert into the customer, you should carefully select the budget of marketing. Of course, the budget should increase with the increment of your business goal. You should invest in making useful offers to the customers. It will help them to decide for you and purchase your product or service.

Make Effective Spending Decisions

Well-considered spending decision often brings fortune to a business. Therefore, you should be careful and calculative while taking the spending decision. Also, you should prepare a plan that can be executed well.

You may separate the budget for spending on various types of marketing channels. Moreover, don’t forget to adjust the expense over the time period.

The marketing budget for different platforms.

There are many other ways of marketing promotion, but making wise decisions of spending can create a new opportunity of making more profit from marketing.

Utilize Best Practices

In this era of modern marketing, you must not confine your marketing in the narrow space of traditional marketing concepts. You can use digital marketing and modern marketing to improve your sales.

The marketing is not an expense of your company. It’s an investment that impacts your ROI processes.

Creating a marketing strategy is at the top of creating a marketing budget. While creating the strategies, you must consider the motive changes that influence the buying attitude and awareness.

A specific target can send your marketing budget further to your business process and assure the best utilization of your money.

Marketing Plan Budget Changes With The Business Niche


You can develop your marketing budget by following the above steps effectively. You may adopt some extra features and functionality based on different business niche, business size or locality.

If you are marketing from a fairly static annual budget, you’re viewing marketing as an expense. Good marketers realize that it is an investment.

Seth Godin

For instance, we have listed 5 business niche to give you a glimpse of the special factors that they should consider before conducting the budget plan.

Online Beauty Salon Marketing Budget

You should keep a large portion of your marketing budget for social media marketing or influencer marketing for your beauty care online shop. Influencers can be social media celebrities or local idols.

Estimate Cost: You should make a budget of around $200-$400 for the first 6 months based on your business outcomes and user’s demand. It includes the cost of the domain, hosting, site-building, and other marketing expenses.

Consider the following facilities before configuring the budget :

  • Post your client’s new look on your social pages
  • Tie-up with local influencers
  • Attractive offers for new and repeat clients

Special Note: Revise your marketing budget for advertising your brand based on your total revenue and client demand.

Ecommerce Shop Marketing Budget


In order to promote your e-Shop drastically, you should allocate your marketing budget for increasing your site speed and smart representation of your eCommerce site.

Estimate Cost: It may cost $600-$800 for the first 6 months to promote your eCommerce site including site building, domain, hosting, paid advertisement, email-marketing and others.

Consider the following facilities before configuring the budget :

  • Google’s organic ranking
  • Social media advertising.
  • Hiring copywriters for magnetic contents
  • Branding your business with experienced marketers

Special Note: Emphasize the factors that generate more sales on your site. Set your budget for SEO and PPC is simple: plan, test, analyze and revise.

Downloadable Digital Store Marketing Budget

For digital store, you can build a community first and then build an effective business plan to promote your eShop. Also, you should ensure easy navigation and high download speed in order to upgrade your customer’s satisfaction.

Estimate Cost: It may cost $200-$350 for the first 6 months to promote your photography site including site building, domain, hosting, influencer marketing, organic SEO, and others.

Consider the following facilities before configuring the budget :

  • Community build-up on social platforms and local surroundings
  • Integration of easy and popular payment gateway
  • Superfast downloading options
  • Ensure transaction security

Special Note: If your products need a license to use then clearly say it on your site that is easy to find and understand for the users. Moreover, add an FAQ section or tutorial to clarify the general issues regarding the process of getting the products.

Photography Shop Marketing Budget

In order to increase the brand value of your photography site, you can participate in physical or online exhibition regularly. Furthermore, contribution to charity and donate at auctions can give you exposure to your audience.

Estimate Cost: It may cost $250-$400 for the first 6 months to promote your photography site including site building, domain, hosting, social media marketing, referral program, and others.

Consider the following facilities before configuring the budget :

  • Offer attractive deals in packages
  • Eye-catchy and highly functional website with image gallery
  • Participate in an online photo contest
  • Get featured on online magazines or popular blog sites

Special Note: Promote your photography shop on Instagram as its the best social networking platform for image and video sharing.

e-Book Store Marketing Budget

To generate more sales on your online book shop add popular books targeting a specific geographical area.

Estimate Cost: It cuts almost similar costs like an eCommerce site. You may budget $500-$750 for your e-Book store promotion.

Consider the following facilities before configuring the budget :

  • Collaborate with famous writers
  • Invest wisely in paid advertising
  • Include bookstore newsletters targetting neighborhood community

Special Notes: Include books on local languages to attract local clients.

The estimation cost can fluctuate with the geographical area, buyer’s capacity, special events, and other circumstances. Also, you should revise the amount with business growth and increase the revenue of your shop.

9 Best Completely Free Online Marketing Strategy

In order to scream your brand and build a relationship with your audience, a strategic marketing plan can help you correspondingly. A strong marketing plan allows you to sell your products or services at a rapid pace. In short, it can fuel your business to span widely.


Therefore, you can build a startup sales strategy to grab new opportunities for your brand. Now, in order to magnetize your potential clients towards your business you can follow these free online marketing tactics to crack the extensive traffic:

Nevertheless, you can drag immense traffic and generate huge sales by integrating proven marketing strategies to increase sales accordingly. You can imply both paid and free tactics for promoting your site. Therefore choose and set your marketing plan according to your company revenue and ultimate goal that fits your budget as well.

Final Verdict

Startups or small business owners usually have a low investment amount to run their business at the initial stage. In that case, they have to distribute their funds in a disciplined way. Otherwise, it will break your bank and you will meet unwanted financial damage in the future.

You should account for the marketing cost during distributing the manpower and other resources.

An organized and researched marketing budget for a small business will help you to define efficient marketing plans for your company growth drastically. In addition, it will resist you from spending money scattered.

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