How marketing budgets are allocated really depends on a number of factors:

  • the industry that you are in
  • the stage of your business in its market life cycle, as well as
  • the size of your business revenue.


Specifically for early-stage startups who need to bootstrap. If you have just seed funding to work with, always start by identifying your priority.

If your product is ready to launch and it operates in a new economy, chances are your intended target segment may not know how your business works and might not be searching for your solution. You might want to allocate marketing to address your immediate priorities in education and awareness.

There may be cases where you want to growth-hack by activating free channels wherever possible, such as PR, partnership, owned outbound sales force, word of mouth, etc.

Your paid marketing would be selective and prioritized for rapid testing.

Mistakes to avoid

There are some common mistakes that startups should avoid making when setting their marketing budget.

1. Setting an unrealistic budget

Either too high or too low based on perception of what is needed, without considering their actual needs or their financial capabilities.

2. Not understanding their target audience

Startups may have a limited understanding of their target audience, which can lead to ineffective marketing strategies and poor return on investment.

3. Ignoring data

Startups may ignore data and analytics when setting their marketing budget, leading to poor decision-making and inefficient use of resources.

4. Focusing on the wrong channels

Startups may focus on the wrong marketing channels, resulting in poor targeting and low conversion rates.

6. Not adjusting the budget over time

Startups may set a budget and then fail to adjust it as they learn more about what works and what doesn’t in their marketing strategy.

No magic formula

In my book “Not a Marketing Textbook”, I covered different approaches towards developing a marketing budget.

It is important to know where your revenue might be coming from.

Constructing your sales and marketing plan to pursue those channels.

You need to invest where it matters.



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