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How Much Should A Small Business Spend On Digital Marketing

As a small business, you likely wear many hats and have a limited budget. You may be wondering how much you should spend on digital marketing. The answer depends on your goals and what tactics you plan to use. However, it's important to allocate some of your resources to marketing, as it can be a key factor in achieving success. Here are some tips for finding the right balance for your business.

Why It's Important To Keep Marketing?

A small business can quickly become bogged down in its day-to-day operations and lose sight of the bigger picture. It's important to keep marketing in mind, as it can help you achieve your long-term goals. For example, if you're looking to increase sales, you'll need to focus on generating leads and awareness. If you want to grow your brand, you'll need to invest in strategies that build trust and credibility.

Read More: 8 Important SEO Trends In 2022

Facts Calculate Your Digital Marketing Budget

Calculate Your Company Revenue

To start, you'll need to calculate your company revenue. This will give you a baseline for how much you can afford to spend on marketing. You can use this formula: Annual Revenue ÷ Number of Employees = Marketing Budget.

For example, if your small business has annual revenue of $1 million and 10 employees, your marketing budget would be $100,000.

marketing budget

Now that you know how much you can spend, it's time to start allocating your budget to specific marketing activities. Remember, your goal is to find a balance between what's most effective and what you can afford.

Determine Ideal Marketing Budget Range

To get an idea of how much you should be spending on marketing, it's helpful to look at industry benchmarks. The small business marketing budget percentage will vary depending on your industry, but the average is about 7-8% of total revenue.

Read More: Digital Marketing: Everything Small Businesses Need To Know

For example, if your small business has annual revenue of $1 million, a good marketing budget would be $70,000-$80,000.

Of course, these are just averages. You'll need to adjust your budget based on your specific goals and circumstances. For example, if you're starting a new business, you may need to spend more on marketing, in the beginning, to generate awareness and build momentum. Or if you're launching a new product, you may need to invest more in marketing efforts to promote it.

Read More: Need To Know Website Security For Small Business

Allocate Your Marketing Budget

allocate your marketing budget

Once you have your ideal marketing budget range, it's time to start allocating your funds to specific activities. Here are some common marketing expenses small businesses face:

  • Search engine optimization (SEO)
  • Pay-per-click (PPC) advertising
  • Social media marketing (SMM)
  • Content marketing
  • Email marketing

How you allocate your budget will depend on your goals and the tactics you plan to use. For example, if you're looking to generate leads, you may want to invest more in SEO and PPC. If you're looking to build your brand, you may want to invest more in content marketing and social media.

Read More: How To Start A Profitable Online Store

Do Bigger Budgets Always Win?

No, bigger budgets don't always mean better results. It's more important to focus on quality than quantity. You can still achieve your goals with a small budget if you're strategic about how you spend your money. For example, let's say you have a limited budget for paid advertising. Rather than spread your budget thin by running ads on multiple platforms, you may want to focus on one or two that are most likely to reach your target audience. Quality trumps quantity every time. Digital marketing is a key factor in the success of small businesses. By finding the right balance for your business, you can ensure that you're making the most of your marketing efforts and achieving your goals.


Small businesses should focus on quality over quantity when it comes to digital marketing. A small budget can still be effective if it's spent strategically. The most important thing is to have a clear understanding of your goals and the tactics you'll use to reach them. With this in place, you can create a budget that will help you achieve success.

Somnath Halder
Somnath Halder | November 1, 2022
Somnath is an expert in Digital Marketing with 3+ years of experience in SEO, Facebook leads, and Google PPC, he loves talking about content creation, SEO, and Link Building.

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YapBuzz is a Website and Mobile App development company focused on building the perfect product for clients all over the world. We have worked on a diverse field of web and mobile technologies, both for large corporate such as McDonald’s, Skechers etc. as well as exciting startups.

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