I get this question all the time from growth-minded entrepreneurs. Some industries have a rule of thumb (“20 percent of sales in a given period” or “last year’s profit margin”). But the truth is, it varies so much based on industry, business, and entrepreneur that it’s hard to follow a general rule.
That said, here’s the advice I consistently give to entrepreneurs who ask me:
“Spend as much as you possibly can!”
Most entrepreneurs short-change their marketing, convincing themselves that referrals or great service will do the marketing job. Referrals and high-quality service are important, but those things compliment your marketing. They don’t replace it.
If you want to grow your business, particularly if you’re in stage two or three wanting to build a seven-figure business, you must push yourself out of your comfort zone and invest more in marketing. This might mean you take home less money as you “invest in the business.” However, by making this investment, your business will grow and you’ll have a lot more to take home in the future.
SBS Idea of the Day: Get crystal clear on what your monthly marketing budget was last year. Compare it to your marketing budget last month. Is the budget growing? Grow your budget and you’ll grow your business. Try to add 10 percent more to your marketing budget next month, then repeat the process each month.