Sales and Marketing for Startups: How much should you spend?

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Sales and Marketing for Startups face unique challenges: limited budget, the need to build demand and much more. 


That’s why, as a startup, it’s critical that you’re fully aware of your budget and resources, and use that information when making decisions.


When your company is still new, it can be confusing to determine an initial marketing budget. To figure out how much is going towards your marketing budget, first, you need to determine your gross revenue. When you know the revenue available for marketing efforts, you can then decide how to maximise your spending to align with your goals.


According to a recent survey, the average marketing budget for startups is 11.2% of overall revenue. This is so you have enough to build brand awareness and start attracting leads.


However, the answer will also depend on your company’s unique circumstances. The percentage you apply will depend on the startup’s size, age and industry.


There are a few considerations that can guide your marketing costs.

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Startup Marketing Budget Considerations

Once you know the overall budget of your company’s total revenue, you can break down the costs. Think of factors that will come up naturally along the way, and what resources you’ll need to make that happen.


You can put that information in a spreadsheet, or you can use a template.


You can include factors such as:

Which path should a marketing budget take?

Marketing Goals – The first step toward marketing budget allocation is determining your marketing goals for the year. Sales and Marketing for Startups is different from conventional marketing because you often need to use marketing to test and learn about your market. It’s critical to take the time to think about these goals before you start. 

Technology – When creating campaigns, think about the technology you need to use, such as software to build and maintain a product or service page.


Research – If you don’t know your target audience yet, you may need to invest in market research.


Automation – There are services to automate most of the marketing process for you, such as organising leads and website management. This can be beneficial to businesses that don’t have the resources to spend money on extra hands to complete projects.


Production – Note any expenses for what you will need to create marketing messages. This includes graphic design, photography, or videos. 


Paid Advertising – If you’re planning to run ads, include these costs in your marketing budget. You can find figures on how much you can expect to spend on paid ads.


Branding – These are assets you use to build the first impression of your company. From logo design and visual identity to brand positioning and story, business cards, sales collateral, and website design.


Content MarketingDetail how much you’re going to allocate to the content you will deliver. You can flex your budget to fit your financial needs. Your startup marketing budget should allocate for the design and creation of content to be delivered. This includes blog posts, case studies, videos, and images. You also need to use SEO tools.


Traditional Advertising – If applicable to your business, make a section for traditional advertising methods. Paid advertising occurs mostly online, but traditional advertising refers to marketing efforts outside of that. Includes channels such as print, direct mail, billboards, TV and radio ads. 


Unexpected – Unexpected situations always happen. Things break, don’t work, or sometimes take more time than expected. When you figure out your budget, ensure to set aside an SOS amount for costs that may come up unexpectedly.


Once you’ve chosen what to consider for your marketing budget, you can then define how much of it will be beneficial in each area. Think about your business and campaign goals. From those goals, choose the sections you want to invest the most in.


Working from your business goals will help you make guided budgeting decisions. 

You may not need to factor all of these expenses into your budget – or, you might need to factor all of them. It will depend on what your business needs are.

What is Your Cost Per Customer?

For your marketing costs to be worth it, you should define how valuable your marketing efforts are in terms of each lead, conversion and customer. Just be prepared to tweak the numbers as you get a better idea of actual performance.


To work out your cost per customer, take the cost of your sales and marketing over a period of time. Then, divide it by the number of customers acquired during that period. By taking this data-driven approach to your marketing spending, you’ll be able to make better decisions and determine your marketing ROI.

Maximising Your Budget

startup sales and marketing growth

Sales and Marketing for Startups is all about balancing cash flow with the need to grow. 

There are a few strategies to help you get more from your budget.


Choose Expenses Wisely

Building your business is always going to be expensive, but some costs are more important than others. Commit to spending on what your business needs. Having a clear line for necessary expenses helps ensure you spend when appropriate.

Embrace Analytics

To be sure that you optimise your budget, it’s handy to have the help of smart tracking tools. Make sure you use traffic, conversion, and lead monitoring tools. This will help you identify areas of your marketing that aren’t performing well, areas that need to be tweaked, and the ones you’re already excelling.


Assess Each New Marketing Strategy

Evaluate how your business will produce profits before investing any money into your idea. Make sure that each marketing strategy has some chance of bringing a return on your investment.


Keep Your Budget Updated

Your budget is just a forecast. It should be regularly updated throughout the year and whenever the need arises. You need to revisit it and make updates, especially once you have new information.

The Process

Sales and Marketing for Startups requires that you build a detailed budget that is designed to meet your goals. 

Your marketing budget keeps track of your expenses and allocates funds towards essential resources. It also enables you to plan for the future based on campaign goals.

How you manage your budget will determine the way new customers discover your business. Rather than thinking of marketing costs as an expense, they should be considered an investment.

To make sure your spending is under control, having a marketing budget is essential. It gives you the reassurance that you won’t put the company at risk with every marketing decision you want to make.

Our team, at Nituno, knows how your marketing investments can result in profit. We’d love to hear from you if you need advice on developing your marketing strategy.

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