New Venture Lab: Equipping Christian Entrepreneurs

Question

How much should I budget for marketing?

Answer

It depends on the type of business, the stage of the business and the industry it serves.  I would recommend that you look at peer companies that are publically traded to get a sense for what percent of revenue they invest in marketing to get a sense for the typical marketing investment in your industry.  I would also recommend that you look at peer companies that are still in an early stage of development to see what they are spending.  For example, it is quite normal for an early stage software company to spend 2X revenue or more on marketing, while a large, mature software company might only spend 10% of revenue on marketing.  Some industries with a lot of competitive rivalry and active discounting may spend 15% or more of revenue on marketing, while other industries with less rivalry might spend less than 5%.