After establishing your business, the next thing you would want to do is to let people know about your business. Anything you do in an attempt to let people know about your business and want to patronize you is marketing.

You can verbally (orally) tell people about your business products, hand out flyers to them or make posters (this is known as field marketing); or you can go on the internet to tell people about your business and why they should buy from you (this is known as online marketing).

RELATED: Do I choose Online Marketing or Field Marketing?

Any way you choose to let people know about your business, you will surely incur some expenses and costs. In this article, we will discuss why you need to have a marketing budget and how much you should spend on marketing.

How important is it to have a marketing budget for my business?

You should know that a budget is simply a list of items and the estimated resources to be spent on that item. Simply put, it is the amount of money you set aside to take care of a particular expense or cost.

In this case, a marketing budget will help you to determine the amount of money you would want to spend to take care of marketing expenses. It acts as a check on you when you attempt to spend more than required or necessary on marketing your products.

Through your marketing budget, you can assess whether you have overspent or underspent on marketing and adjust the budget accordingly.

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Is there a limit on how much I should spend on marketing?

Putting a limit to how much you should spend on marketing may sometimes seem as though you are underselling yourself. However, this doesn’t mean that you should spend carelessly on marketing. It means that, since there should be a limit to everything, including your marketing budget, this limit should not be too rigid and strict. It should allow revisions.

For example, say you intend to spend N100,000 in marketing your business for June and by June 20th, you discover a very attractive marketing opportunity that is sure to generate large sales, but you would need to spend N120,000 to seize this opportunity.

Such a situation would make you quickly revise your marketing budget to accommodate this new opportunity.

Essentially, there should be a limit to how much you spend on marketing but this limit should not be too strict and rigid. It should flexible enough to accommodate any upward or downward revisions as the case may be.

How big should my marketing budget be to be considered acceptable?

An ideal marketing budget should be set between 2% to 10% of sales revenue. This is according to the U.S Small Business Administration. Some businesses however exceed this range and even spend as much as 20% of sales revenue on marketing activities.

It is also important to note that the size of your marketing budget would vary depending on the industry and the size of your business.

For example, JUMIA, a large online retail & wholesale store, may set its marketing budget at N5 million. A small retail supermarket won’t be able to set such an amount. Rather the supermarket may set its marketing budget at N10,000.

Generally, the size of your marketing budget will be considered acceptable if it accommodates the following:

1. Any anticipated changes or developments in your brand. For example, if you sell wigs and you are looking to add perfumes to your line of products, your marketing budget should take care of the costs of advertising those perfumes.

2. The ongoing/current level of marketing expenses. For example, you have observed that to market your wigs, you usually spend at least N50,000. It is only wise that your marketing budget should not fall below N50,000.

RELATED: Marketing Budget Templates to Guide Your Business 

Conclusion

Without a marketing budget, there would be no control over how much you spend on marketing; advertising and promoting your products and services. The size of your marketing budget should correspond to the size of your business.

We at SmartSMSSolutions can assist your business using a very affordable yet effective way of marketing, SMS marketing. With this, you can reduce excessive costs of marketing and also grow your business quickly. Register with us now or call us on 07034243326 so that we can take your business to the next level and boost your business sales.

You can also leave us a message at This email address is being protected from spambots. You need JavaScript enabled to view it. if you have any questions on how to set up your marketing budget.

RELATED: Creating an Outstanding Marketing Plan for Your Business