Startup Marketing Budget: How to Do Marketing for Small Business

While researching information on how to create and stick to a budget for your startup, you may have felt some frustration.

So much of conventional marketing wisdom assumes you already have a business that’s up and running. 

For instance, using a percent of your revenue to pay for marketing only works if you have revenue to begin with.

And so much advice seems aimed at an audience with a seemingly limitless budget and personnel to execute it. Which, if you’re like most startups, really doesn’t apply. 

And so, you can end up in this never-ending confusing loop of needing to market your business so you can make revenue, but also needing revenue so you can pay to market your business. 

Here’s some good news. You don’t need to have a lot of revenue to market your business. In some cases, you don’t need any revenue at all! 

In this guide, we’re going to focus on getting the most bang for your buck with the most effective marketing strategies.

We’ll also answer the age-old question: how much should I be spending on this type of marketing?

Why Startups Need to Focus on Marketing

Marketing is the process of promoting products or services by generating public interest or desire for those products or services. 

Startups often use marketing campaigns to make their product known to the general public and inform them about its features and benefits.

Marketing budgets are often the first cut for startups when times get tough. 

However, if you launch the greatest product in the world, but no one hears about it, did it even happen? 

It can be hard to part with money, but you need to remember that marketing is not just a cost—it’s an investment.

What you need in a successful business is balance, but with more emphasis on marketing at the start. Legacy brands can afford to coast on their good name, but you don’t have that yet! 

Before you launch your product, you should spend time gathering interested potential customers. Starting a business is expensive, so it’s essential that you come out of the gate with sales to get a start on recouping your investments. 

You can even use customer interest to gain more investors. That’s the business model of crowdsourcing sites like Kickstarter or Indiegogo, which allow anyone to invest in a startup.

How Much Money Should You Spend on Startup Marketing?

A marketing budget is a plan that outlines how much money will be spent on marketing activities over a certain period. Of course, the cost of running a marketing campaign differs depending on the type of startup, its stage, industry, size, and location. Instead of talking numbers, we’ll discuss it in terms of percentages.

Typically, established businesses spend about 10% of their budget on marketing

Of course, there are no absolutes in business. This number depends on your sector. For example, education and customer services allocate around 18% of their budget to marketing. In comparison, energy and construction only use about 2%. 

So, this number will vary based on how much your competitors are spending.

Unfortunately, no magic formula exists to tell you exactly how much you should spend on marketing. But as a startup, a good goal is to allocate a quarter of your budget for marketing

If 25% seems too arbitrary (or impossible), use the rule of thumb to reserve the standard percentage for your industry, and then put all the money you save elsewhere into marketing. 

The extra money put toward marketing will prime the pump. Then, as your brand catches on, more organic methods, like word of mouth, take over. But right now, you’ve got to generate the buzz yourself.

Marketing Strategy Elements and Their Costs

Now that you’ve come to terms with the fact that you need a big budget for marketing, you may be wondering where you’re spending that money.

And that’s a very fair question! Especially if you don’t come from a marketing background, the whole process can seem overwhelming. Of course, as consumers, we’re bombarded with advertisements constantly, but it can be challenging to see the big picture.

To make a budget for a marketing campaign for startups, you need to consider: 

  • what you want to achieve with your campaign
  • how much your startup has to spend on marketing
  • and how much time you have to invest in your marketing campaign

Each cost will vary depending on the type of company you are running and what product or service you offer. Marketing strategies should be customized in a way that reflects the core niche of your company. For example, if your firm is fully based in technological innovations, then you will need to curate a tech marketing strategy. Similarly, if you work to provide essential services, then you will have to come up with a strategy aligned with the same. In addition, the budget will depend on various factors, such as your target audience and budget constraints. 

Since there are so many variables, you’ll need to consider your circumstances when budgeting. But these are the basic costs associated with a marketing budget:

Salary for a marketing team

As a startup, this is a negotiable cost, depending on the size of your business. The team may just be you and your partner. However, if you choose to do everything yourself, you have to consider the opportunity cost. 

It may be worth it to hire an experienced marketer, so you don’t have to think about it. You can hire someone in-house (full-time or part-time) or a contract worker. 

The benefit of having in-house marketers is that they can think about and work with long-term brand development strategies. But it’s wise to outsource as much as you can until you have a steady need.

Generally, there are many reasons why you should consider outsourcing your marketing needs. For one, outsourcing professionals may be a cost-effective option if your company lacks the appropriate marketing skills, and you need expert assistance with some marketing elements.


We’re lucky to live in an era where there are many great programs to make your marketing more effective and efficient.

Automation is one of the best ways to stretch your team. But these programs aren’t free. Almost every service has a subscription fee associated. 

Email services like MailChimp and HubSpot have a free tier, but you can assume that many of the tools will cost in the long term. 

Automation is almost always cheaper than hiring someone to do it for you. It also ensures that your team can focus on the more complex tasks.

Moreover, using marketing automation software has other essential benefits. For instance, it can help streamline marketing efforts by coordinating several campaigns and programs in a single, easy-to-use platform.  Also, with marketing automation software, you can reduce the risk of human error and obtain the data and insights you need for your small business marketing campaigns. Another benefit of using software is it makes customer management much easier. For example, a lead nurturing system allows you to respond to leads immediately, keep track of your customers, and establish a solid online presence. 


This part of your budget encompasses all digital and physical marketing materials. This budget can be vastly different depending on the type of marketing you focus on.

As a startup, you need to get the most out of your marketing, so this next section is about the most cost-effective forms of advertising.

Most Cost-Effective Marketing Strategies

The cost of content marketing varies depending on the type of content created and its distribution channel. You want to make your budget work smarter, not harder, so it’s best to choose your campaigns wisely when you’re starting. 

You don’t want to sink all your budget into one expensive campaign. According to WebFX, the most costly mediums for nationwide advertisement are TV advertising and magazine and newspaper ads. These can cost millions of dollars to produce and then distribute.

Giant corporations can deal with failed campaigns, but one ineffective TV ad could sink your startup.

Luckily, you don’t have to sink millions to make an impact. Some marketing strategies are both inexpensive and highly effective. 

Here are some of them:

  • Influencer Marketing: This strategy relies on social media influencers who have a large following and can promote your brand to reach all the potential customers quickly and inexpensively.
  • Blogging: You can use your website or a platform like Medium. The benefit is that articles are relatively inexpensive to produce and position yourself as an expert. Also, since people searched to find that content, it means they’re more likely to be interested in what you’re selling. 
  • SEO: Search Engine Optimization or SEO is a tactic you should use on all the content you produce. It just refers to the process of making content easily accessible to search engines. You can hire an SEO expert, but it’s also something you can research and implement easily with SEO tools like Ubersuggest or Moz. On the other hand, if you want to attract more local customers and improve your local conversions, you should try local SEO. To help you get started, you may work with professionals who specialize in local SEO services. This enables you to get new customers and grow your small business. 
  • Video: With the rise of video-sharing platforms, you don’t have to rely on national television services to distribute your content! You can make professional-level videos with video-making tools and distribute them using TikTok and YouTube.
  • Email Marketing: Emails are still some of the most effective forms of advertising, blowing physical mail out of the water. They are quickly produced and customized based on the customer, and email services will give you valuable analytics.Also, email marketing allows your small business to engage with your target audience more quickly. Since almost everyone accesses emails on their mobile phones, your marketing message will reach your audience whenever and wherever they are. 

All these strategies have in common that they are all digital marketing. Digital marketing is an advertisement that uses phones and computers to reach customers.

With the help of online ads, you can reach out to your target audience with ease without having to spend too much money on TV or newspaper ads.


Your budget may be tight, and your team of savvy marketing professionals might just be you. But the truth is that the more you invest in marketing at the beginning of your business, the more you will see in return. 

Using clever digital marketing techniques and investing time and money into your marketing campaigns will give your startup the leg up it needs.