Get Connected! Sign up for my FREE newsletter on

- How to connect with your clients
- How to take those connections to the next level
- Plus my FREE e-book: 5 Ways to Get Started with Social Media

How Big Should the Marketing Budget Be for Your Small Business?

Entrepreneurs often wonder how much they should budget for marketing. Unfortunately there are no convenient formulas to figure this out; for the most part it depends on:

  • What kind of activities you plan to undertake
  • The minimum investment needed to move the dial
  • What the competition is doing

This post will touch on these three ideas – I hope they help you put together the best possible budget for your small business.

Marketing Activities: Time vs. Money

Some marketing activities are labor-intensive and some are dollar-intensive. For instance, social media marketing is incredibly labor-intensive, but requires very little cash outlay. In contrast, pay-per-click (PPC) advertising cannot be undertaken without a monthly ad spend of a few hundred dollars to several thousand, over and above whatever campaign management fees apply.

Many entrepreneurs gravitate to social media, content marketing and blogging because they are low cost – but are they? Whatever you calculate the value of your time to be $50/hour, $100/hour, $500/hour – these “free” marketing activities can become an enormous productivity drain, keeping you from taking on other business-building tasks that hold greater potential.

If you spend 20 hours a month on these activities, that’s $1000/month, if you value your time at $50/hour. After you make this calculation for your situation, consider:

  • What kind of return am I getting on this $1000/month (or whatever) investment?
  • If I stopped these activities, what could I do instead to generate a greater return for my business?
  • If I outsourced $1000/month (or whatever) on other marketing activities such as PPC, could I obtain a better return?

The answers will be different for every business, but if you’re not asking them on a regular basis, you’re sure to overspend, either in terms of time or money.

Moving the Dial

Our agency turns down PPC and SEO engagements all the time because the client (and this could be either a small or large firm) is unwilling or unable to make an investment big enough to move the dial, i.e., to generate a return on investment.

Let’s consider SEO, a marketing activity that just about every business thinks it needs to spend money on. While SEO is indeed terrific for many firms, the economics aren’t always there.

One obstacle is low search volume. If you sell within a small geographic market, or sell a highly specialized product with low demand, you may not be able to generate a critical mass of organic traffic no matter how much you spend on SEO. What’s the point of achieving #1 ranking on all of your strategic keywords if it only adds up to a handful of visitors every month and a handful of leads a year?

Two other obstacles are low order volume and low lifetime customer value. If your profit margin on a transaction is only a few dollars, it may cost more to generate the lead via SEO than the sale is worth. And, if it’s a one-time or infrequent sale, the economics become even less attractive.

Most situations, however, are not either/or; they are only a matter of degree. The key question for SEO and PPC is how much do I have to spend to generate enough traffic to generate enough business? The same thought process applies to those “free” marketing activities: how many blog posts or tweets or Facebook posts do I need to write to generate enough brand awareness/traffic to generate enough business?

The Competitive Context

The more competitors who are blogging, the more you’ll have to blog in order to get noticed. Same goes for SEO or PPC: If you are trying to get noticed for highly competitive keywords, the cost goes up – sometimes way, way up. If you’re in a situation like this, rather than taking on an excessive budgetary commitment, consider a contrarian marketing strategy. For instance, if everybody in your niche is content marketing like crazy, perhaps a modest spend on radio advertising, where you’re all alone, will produce great results.

Just remember There are only two reasons why firms engage in a given marketing activity: either because it works or because everybody else is doing it. All too often, firms dive in for the latter reason, and never bother to evaluate whether it’s working. A serious budgeting process should focus on the activity’s value, not its popularity.

Over to You

  • How did you arrive at the budget for your business?
  • What small business budgeting tips can you share?

brad shorr How Big Should the Marketing Budget Be for Your Small Business?Brad Shorr is the Director of B2B Marketing for Straight North, an Internet marketing agency headquartered in Chicago. With many years of entrepreneurial experience, he writes frequently on business strategy and content marketing topics.

Simple Facebook Marketing

You know that online marketing has become a fast growing phenomenon with businesses. Now, that type of marketing has spilled over into social media, and many are taking advantage. Perhaps the biggest winner of the trend is Facebook. Thanks to an ability to start with a low budget and reach users who are on the site daily, Facebook advertising has become very popular. And it works.

Whether you are working from some corner office desks in your home or in a large corner office of a major corporation, it’s important to know about Facebook advertising. Here are the main components, laid out in some detail, so you know what to keep in mind when advertising.


According to Facebook data, “posts between 100 and 250 characters get about 60% more likes, comments and shares (and) photo albums, pictures, and videos get 180%, 120%, and 100% more engagement respectively.” It’s best to keep everything visually appealing and short and sweet. Facebook users won’t stay on one page for long so it is important to grab attention.

Audience Building

It doesn’t cost anything to invite all of the friends on your Facebook list to “like” the business’s page. For that reason, it is a great place to start when trying to build your audience. You should be able to ask some of the friends on your list share your page with their friends, which will increase the amount of people exposed to your page, and thus, will increase how many people actually “like” you business page.

You can also invite everyone on your e-mail contacts list to like the Facebook page. Even if they are not Facebook friends of yours, they are still able to participate. It’s important to get as many people as possible to like the page, so don’t feel ashamed of exhausting all resources. Don’t beg, and don’t invite over and over again, but do invite people you know might be interested in your page.


Facebook now allows for paid advertisements to show up on news feeds for users. You can narrow down the location, age and gender of the users you want to market yourself to. From there, you can create a budget and prepay for advertising your page.

Great news: You can reach every single Facebook user in the world. Hooray! 1.1 billion people can but that is going to cost more money than imaginable. If you want to narrow it down to just a couple thousand people, though, it should only cost around $10 per day. Once people start following your page, you will have to engage the audience on a nearly daily basis.

Promoted Posts

Let’s say, for example, that you make a new post on your Facebook page. If a follower were to “like” the post, that would be the end of it. However, with promoted posts, it will show up on the user’s newsfeed that he or she did like it. Pretty cool huh?

This is how you grow beyond an organic marketing reach. There will be reports showing what percentage of traffic is coming in organically, and how much is coming in through promoted posts and advertising.

Since Facebook offers so many tools, it is simple to use. It is also proving to be a very effective method of marketing, and should certainly be worth your company’s time.

Different Options

Facebook advertising presents two different advertising budget options. The first is a cost per click method, while the other is a cost per thousand impressions. It’s easy to get an enormous amount of impressions on Facebook, but getting clicks is hard. For this reason, many advertisers opt for the cost per thousand impressions method.

Pros and Cons

After having discovered some of the above facts, it’s important to make a decision based on budget. To summarize, here is a quick rundown of the Pros and Cons of Facebook advertising.


-Specific targeting

-Low costs for small market businesses

-Ease for others to spread word

-Organic word of mouth lowers cost


-Lowest cost plan doesn’t cover many people

-Many online users simply ignore promoted posts

-Can take time for ad to appear

-Facebook will suggest a higher amount no matter how much you budget

Marketing on a Micro Budget

Note from Phil: This is a topic I get asked about all the time, and I thought it was time to share someone else’s point of view on marketing on a micro budget. Enter Chris Garrett.

stack of pennies Marketing on a Micro BudgetA solid marketing campaign is one of the most important tools when it comes to building your business, but the costs can seem overwhelming. With some clever planning and some tips from the pros like our friend Phil, you can coordinate successful marketing without breaking the bank.

Bringing them in

Drawing customers into your store can be expensive, but try some of the classic, low-budget standards that businesses have relied on for decades.

  • Use an inexpensive A-frame sign to lure customers in off the sidewalk. Flyers can be a great way to raise awareness of your company without requiring a huge investment, and on the local level they can be incredibly effective.
  • Community involvement is another excellent way to create brand awareness and to build customer loyalty. More and more consumers are considering the ethical behavior of companies when deciding to spend their money. They care whether or not a company cares, and by getting involved in community events, either through sponsorship or volunteering, you can demonstrate to your customers that you care about more than the thickness of their wallets.
  • Setting up cross-promotions with other small businesses can help reduce the cost of traditional advertising like newspaper or radio ads. Consider putting together some kind of event that you can both promote, which may even generate free ad time if it is interesting enough to get the attention of local news outlets.
  • In-store marketing is incredibly important, and with a few great affordable décor options you can take full advantage of your physical location. Custom wallpapers and other inexpensive signage options can reinforce your brand identity with customers who have decided to give you a shot.

Bringing them back

Once you’ve gotten the customers in the store, don’t forget their value when it comes to marketing.

Happy customers will advertise for your company through bumper stickers, T-shirts, and other product placement. Spend a little extra on packaging with your brand identifiers on it so that your customers can easily express to their friends and family how much they enjoyed your service.

There is nothing more important that providing your customers with quality. Excellent products or services will go further than anything else in building your customer base and encouraging brand loyalty. It doesn’t matter how many people you bring into your store or get onto your website; if they find nothing of value when they arrive they won’t be back.

Whether consumers come to you in a brick and mortar business or online, they are looking for companies who are responsive and accessible. Being available for customer inquiries and responding appropriately to customer complaints will demonstrate that you care about providing value to them. In the age of social media, this can actually convert a customer to a brand advocate.

Happy employees can be the strongest brand advocates. Offering an employee discount will encourage them to spend money in your store, and maybe even to use your product around their friends and family. If they’re happy, they’ll have a vested interest in drawing customers in for you, and if they’re unhappy they’re likely to share that with everyone they know.

YOUR TURN: What’s your best way to market your business on a micro budget?