Free tool
Marketing budget calculator
Your revenue, your gross margin and the share you choose, into a budget for the year and the month. Then the figure the usual calculators leave out: the sales that budget has to bring in, at your margin, before it has paid for itself. Split it across the channels you name. Nothing you type leaves your browser.
The search share is the one with no bill per click, which is what our SEO services are for.
Your budget, and what it has to bring in
- Budget for the year
- A month
- Sales it has to bring in
- Of what you already sell
Why the share is yours to choose, and what decides it
Every calculator on this subject pre-fills a share of revenue and calls it what a business should spend. The shares disagree with one another because each comes from a different survey of different companies, and a company selling software to other companies has nothing in common with a plumber when it comes to the cost of the next customer. So the share here starts empty. What the page gives you instead is the arithmetic the shares leave out: at your gross margin, a budget of any size has to bring in that budget divided by the margin in sales before it has paid for itself, and that figure is what decides whether a share is sane for your business.
Say the business turned over 240,000 in the last year at a 40 percent gross margin, and you type 8 percent. The budget is 19,200 for the year, which is 1,600 each month. At that margin it has to bring in 48,000 of sales over the year to pay for itself, which is one fifth of what the business already sells. Whether that is reasonable depends on what an enquiry costs from the channels the money goes to, which is why the figures on either side of this page are the cost per lead and the cost per click. If 48,000 of new sales looks like too much to ask of 19,200, lower the share; if the enquiry log says the channels can do more, raise it.
The other way round is more honest and takes one more figure. Decide the enquiries you want a month, multiply by what an enquiry costs you from the channel that produces them, and that is the budget; type the share that gives it and the page shows the sales it must produce. Two methods that agree are a budget you can defend at the end of the year.
Splitting it across channels
The split most businesses type is the split of last year's enquiries, read from the phone log and the inbox rather than from memory: if seven customers in ten came from search and one from the leaflet, the leaflet's share of the budget is a decision to be made on purpose. Search is the channel with no bill per click, so its share buys time or a retainer rather than clicks, and it compounds; advertising stops the day the budget stops. The 70/20/10 habit in the questions below is a way of leaving room for something new without starving what already works.
The figures on either side of this one
What an enquiry costs from a channel, and the most it can cost before it stops paying, comes from the cost per lead calculator. For the advertising share, the CPC calculator turns a monthly budget into clicks and enquiries. The break-even calculator is the same margin arithmetic applied to a single job or product, and the SEO ROI calculator is the search share followed through to the enquiries it produces.
Questions about a marketing budget
How much should my marketing budget be?
There is no share of revenue that is right in general. The published shares come from surveys of different companies, measured in different ways, and they disagree with each other. Two figures of your own decide it: the gross margin, which says how much of every sale is left to pay for marketing, and what an enquiry costs you from each channel, which says what a budget will produce. Type a share, read what it has to bring in at your margin, and change the share until the two agree with what the business can do.
What is the 70/20/10 rule?
A habit for splitting a budget rather than a measurement: seventy percent to the channels that already produce enquiries, twenty to the ones that look promising, ten to trying something new. It is one way of typing the split on this page, and the enquiry log is a better one: put the largest share where last year's customers actually came from.
Share of revenue, or working back from a target?
Both, and the page shows which one you are doing. A share of revenue is quick and it is how most businesses start. Working back from a target is more honest: the enquiries you want a month, multiplied by what an enquiry costs you from the channel that produces them, is the budget, and the page then tells you what share of revenue that turns out to be. The cost per lead calculator gives the figure that method needs.
Does the budget include our own time?
Only if you count it. Search work done in-house, a member of staff posting for the business and an owner replying to reviews all cost hours that do not appear on an invoice. If you want the true figure, put a value on those hours and include it in the share; if you want the cash figure, leave it out. Say which one you did when you compare against another year.
Is anything I type here sent anywhere?
No. Everything happens in your browser. There is no form submission, no analytics event and no network request of any kind, which you can confirm in your browser’s network tab.
Book a call with us
A 30-minute call in your working hours. Tell us what you sell and where, and we will tell you what we would do first and what it involves. Prefer email? Send your website through the form and the Passieon Team will reply within two working days.