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How Much Should a Company Spend on a Marketing Budget? |
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In the words of a local accountant, "It all Depends". Depending on how fast you want to grow your business, the percentage of the amount spent on a marketing budget (MB) can vary. "3% of the firms spent 1% of gross sales, 43% of the companies spent 1-5% and 25% of companies spent 6-10%. Amazingly, 18% of these companies spent 11-20% of their gross receipts on marketing and 10% of the interviewees spent 21-50% of gross receipts on sales and marketing efforts! Now that's commitment!" Ok, enough of the facts. You can use one of the above percentages, or to keep it simple, you can use this cool method: Take 12% of your yearly gross sales (or estimate gross sales) and subtract from it the yearly rent. The remaining amount should be your yearly MB. From that remaining amount here is the breakdown of how to allocate your MB. 50% to Build your Brand 25% for Special Events/Sales 15% for Unexpected Opportunities 10% for Fourth Quarter Slush (Or your busy season) |
