Marketing is an essential department for any business. It’s wise to spend a reasonable amount on marketing, but working out what that amount should be is tricky. This is especially true when your business is new, as it’s likely that a startup won’t have too much money to spare.  

This article will help you decide how much to spend on marketing for a startup and suggest a few things you might spend your marketing budget on. We’ll cover topics such as:

  • Possible marketing expenses
  • Prepare to spend more than you expect
  • Managing your finances to create a marketing budget

Possible marketing expenses

Before you start calculating how much money you’re going to set aside for marketing, it’s a good idea to look into the kinds of marketing available and how much they might cost. As well as helping you put together a marketing budget, this research can help identify what marketing methods are best for your business.

PPC advertising 

PPC or Pay Per Click advertising is a marketing tool that’s very popular with businesses that operate primarily online. Essentially, it refers to a kind of internet advert that only costs you when a user clicks on it. This generally saves the business money, as they don’t need to continuously pay to keep the advert up, only when someone clicks on it. 

PPC adverts might redirect the person clicking on them to your website homepage or a specific product. An important thing to remember is that you’ll pay for every click, not just those from people intending to buy from you. People clicking to find out more about your business and accidental clicks will cost you as much money as actual customers do.

PPC adverts are fairly cheap. Google and Facebook, two of the biggest providers of PPC advertising, have an average cost of less than £2 per click. This means that a good advertising budget for a startup doesn’t need to be in the thousands.

Software subscriptions

There are hundreds of different ways that technology can help your business, and one of them is by improving your marketing campaigns. One possible marketing expense is paying for marketing software.

There are a huge number of marketing software tools, with most providing different services to a user. For instance, Hootsuite helps manage your social media accounts, and Mailchimp focuses on email marketing and providing analytics.

The cost of subscribing to these services varies massively — Hootsuite’s pricing starts at £39 a month and goes right up to £520, whereas Mailchimp offers several options from a free version to a £220 one. 

This means that the money you’ll pay depends on the service you choose to use and that in turn depends on the needs of your individual business. So research what software is best for you before you add it to your marketing budget. 

Social media

Although we’re listing it as a potential expense, social media is free for the most part. In fact, the free marketing it can provide is one of the biggest reasons that social media is important for business. Creating a profile costs nothing, and although it can be challenging to produce engaging content and build up a following, this doesn’t cost any money either. 

If you want to get more results from social media, though, you can also pay for some additional services. These include things like PPC advertising or boosting the range of your posts beyond your followers. 

These are handy services to pay for if you think social media will be an effective way to market your startup, but you don’t want to spend a lot of time attracting followers to make sure your posts reach many potential customers. 

They’re also cheap: Facebook, Twitter, and Instagram offer very affordable PPC advertising rates. Facebook and Instagram also provide the ability to boost posts from only £1-£5 per day, and you can customise your budget for this service by setting a maximum you’d like to spend. 

Prepare to spend more than you expect

We’ve provided some potential expenses above because research is essential when considering how much to spend on marketing for your startup. It’s wise to learn about different marketing strategies and how much they cost, so you know the best choice for your business.

Once you complete this research, another important factor to consider when creating a marketing budget is unexpected costs. If you run a startup, you might not be sure of the best way to market your company. It may be that you spend a lot of money on social media marketing before you find out that PPC works better for you.

It’s set aside extra money to spend on marketing in cases like this where you try out some strategies that end up being ineffective. By doing this, you’ll both stay within your pre-planned marketing budget, and you’ll have another chance to try marketing strategies if your first idea fails.

The foundations of a marketing budget

Budgeting for marketing will be difficult if you’re not sure how much your business is making or spending. On the other hand, keeping track of your finances can be time-consuming and complicated if you don’t have much experience as an accountant.

Luckily, there’s a way to make your financial management much easier. There are many different financial management apps available to business owners that can help track income and help work out how much of that income you can spend on marketing. One great example is the Countingup app.

Countingup is the business current account with built-in accounting software that allows you to manage all your financial data in one place. With features like automatic expense categorisation, invoicing on the go, receipt capture tools, tax estimates, and cash flow insights, you can confidently keep on top of your business finances wherever you are. 

You can also share your bookkeeping with your accountant instantly without worrying about duplication errors, data lags or inaccuracies. Seamless, simple, and straightforward! 

Find out more here.