Generally speaking, startups spend around 11% of revenue on marketing budget. The average startup spends between 10 and 50% of its budget on marketing, depending on if it is VC-backed or bootstrapped. You cannot spend what you do not have, so it is critical to know your projected annual or net income before considering spending on marketing.

Figuring out your gross income, and what percentage of it will be allocated to your marketing budget, will be your biggest resource in understanding what you are going to spend. The revenue-based budgeting process is useful for startups, as it gives you a birds-eye view of how much money you are making, as well as how much you are prepared to spend.

Some marketing experts have commented that, actually, startups and small businesses typically actually allocate just 2 to 3 percent of revenue to marketing and advertising. As you can see, companies that have marketable expertise allocate between 5 and 15 percent of their revenues to marketing (some nearly 20 percent!).

The general marketing spending recommendation for a viable company that makes under $5M a year is around 8 percent of gross revenues, according to the US Small Business Administration.

Marketing Costs for Startup

If, like most startups, you have no revenues yet, then budget for a monthly marketing expenditure of no more than $1,000, and link this expenditure to specific, measurable results. You cannot spend what you do not have, so it is critical to know your estimated annual or total revenues before considering spending on marketing.

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