How to Build a Marketing Budget for Startup Businesses

Mantis Funding May 01, 2024

For a startup, a well-crafted marketing budget can be a process. That being said, it has the power to guide you (and your well-defined resources) towards attracting customers, building brand awareness, and ultimately, achieving sustainable growth. However, building a marketing budget for a new business comes with its own set of challenges.

This guide is designed to equip you with the knowledge to navigate these challenges and develop a strategic marketing budget that fuels your startup’s journey. We’ll explore the importance of allocating your resources wisely, the impact on your competitive edge, and some key considerations for creating an effective budget.

Understanding Startup Marketing Budgets

Building a strong foundation is crucial for any startup, and marketing plays a vital role in this process. Here’s how a strategic marketing budget can empower your business:

The Role of Marketing in Startup Success

  • Brand Establishment: Marketing helps you define your brand identity, communicate your unique value proposition, and build recognition in a crowded marketplace.
  • Reaching Target Audiences: Through targeted marketing efforts, you can connect with the specific customers who need your product or service. This allows you to tailor your message and ensure it resonates with the right people.
  • Driving Sales and Growth: Effective marketing generates leads, fosters customer interest, and ultimately drives conversions. By creating a clear path for potential customers to discover your brand and understand its value, you can significantly impact your sales pipeline and propel business growth.

Key Factors Influencing Your Startup’s Marketing Budget Allocation

Several factors influence how much you allocate to your marketing budget. Here are some key considerations:

  • Business Stage: Early-stage startups focused on product-market fit might dedicate a smaller percentage of revenue towards marketing compared to growth-stage startups seeking to scale their customer base.
  • Industry Standards: Researching marketing budgets within your specific industry can provide valuable benchmarks. B2C companies (businesses that sell directly to consumers) typically spend a higher percentage on marketing compared to B2B companies (businesses that sell to other businesses).
  • Revenue Projections: While you might not have a long track record of sales, consider your projected revenue for the coming year. This can be a helpful starting point for estimating what you can realistically invest in marketing.

Remember, your marketing budget is not set in stone — it should be a flexible plan that adapts as your business evolves and you gain valuable insights from your marketing campaigns.

Startup Marketing Budget Planning & Benchmarks

Now that you understand the critical role of marketing in a startup’s success, let’s discuss the practical steps of planning and allocating your marketing budget:

Planning and Allocating Your Marketing Budget

  1. Identify Your Goals: What do you want to achieve with your marketing efforts? Do you aim to increase brand awareness, generate leads, or drive sales? Clearly defined goals will guide your budget allocation.
  2. Assess Your Resources: Consider both financial and human resources. While funding is crucial, a dedicated team with the skills to execute your marketing strategy is equally important.
  3. Research Marketing Channels: Explore various marketing channels like content marketing, social media marketing, email marketing, or paid advertising. Evaluate the costs associated with each and their potential return on investment (ROI).
  4. Prioritize and Allocate: Based on your goals, resources, and channel research, prioritize which channels to focus on initially. Allocate your budget strategically, considering the projected impact of each channel on achieving your goals.
  5. Track and Measure Results: Continuously monitor the performance of your marketing campaigns. Analyze data from each channel to see what’s working and what needs improvement. This allows you to optimize your budget allocation and maximize your return on investment.

Marketing Budget Benchmarks and Industry Standards

While there’s no one-size-fits-all answer, industry benchmarks can offer a helpful starting point for your marketing budget. Here’s a general breakdown:

  • Average Marketing Budget Allocation: Startups typically allocate 5-15% of their overall revenue towards marketing. This can vary depending on factors like business stage and industry.
  • B2C vs. B2B Marketing Budgets: B2C companies, often focused on brand awareness and customer acquisition, tend to spend a higher percentage of revenue on marketing (closer to the 15% range). B2B companies, with longer sales cycles and a more targeted audience, may allocate a smaller percentage (closer to 5%).

Remember, these are just benchmarks; it’s important to consider your specific circumstances and tailor your marketing budget to your unique business goals.

Challenges of Planning a Startup Marketing Budget

Building a marketing budget for a startup comes with its own set of hurdles. By implementing proactive solutions, you can streamline expense management, enhance security, and gain better control over the whole process. Here are some common challenges and practical solutions to help you navigate them:

Expense Management Solutions

  • Pain Points: Managing marketing expenses can be a headache, especially in the early stages of a startup. Paper receipts get lost, manual expense reports are time-consuming, and inefficient processes make it difficult to track spending in real-time.
  • Solutions: Implementing efficient payment processes can significantly improve expense management. Consider:
    • Company Credit Cards: Issue company credit cards to your team with spending limits aligned with their roles.
    • Expense Management Software: Utilize software that automates expense tracking. This allows employees to capture receipts electronically, submit reports quickly, and streamlines the approval process.
    • Prepaid Cards: Consider prepaid cards for specific marketing campaigns to ensure dedicated funds and prevent overspending.

Addressing Security and Fraud Concerns

  • Importance of Secure Processes: Startups are particularly vulnerable to fraud and financial mismanagement. Marketing budgets often involve online transactions and managing multiple vendors.
  • Mitigation Strategies: Prioritize secure expense processes to minimize risk:
    • Clear Spending Policies: Establish clear company policies outlining acceptable spending limits, vendor approval procedures, and receipt retention requirements.
    • Virtual Cards: Utilize virtual credit cards for online transactions. These cards can be limited to specific vendors and spending amounts, adding an extra layer of security.
    • Regular Reviews: Conduct regular reviews of your marketing expenses to identify any suspicious activity.

Maximize Your Startup’s Marketing Budget

Every startup wants to get the most out of their marketing budget. Here are key strategies to optimize your spending and maximize your return on investment (ROI):

Embracing Analytics and Performance Measurement

Don’t just spend money on marketing campaigns and hope for the best; leverage marketing analytics so you can gain valuable insights into how your campaigns are performing.

  • Track key metrics like website traffic, lead generation, conversion rates, and customer acquisition costs.
  • Analyze which marketing channels are delivering the best results in terms of reaching your target audience and achieving your goals.
  • Use this data to optimize your campaigns. For example, you might reallocate the budget away from underperforming channels and invest more in the ones generating strong results.

Aligning Marketing Spend with Sales Funnel Stages

The buyer’s journey typically involves a sales funnel with different stages: awareness, consideration, and decision. By aligning your marketing spend with each stage, you can ensure you’re reaching the right audience with the right message at the right time.

  • Awareness Stage: Here, focus on building brand awareness and attracting potential customers who might not be familiar with your product or service. Social media marketing and content marketing are great strategies for this stage.
  • Consideration Stage: At this point, potential customers are aware of your brand and are actively researching solutions. Content marketing that addresses their specific needs and pain points, along with targeted email campaigns, can be highly effective.
  • Decision Stage: Customers are ready to make a purchase decision. Paid advertising and retargeting campaigns can be powerful tools to nudge them towards choosing your brand.

By strategically allocating your budget across these funnel stages, you can maximize your impact and convert more leads into paying customers.

Why Marketing Budgets Matter for Startups

Mantis Funding’s Perspective

At Mantis Funding, we understand the challenges faced by startups, particularly when it comes to securing the resources needed to thrive. A well-crafted marketing budget is an essential tool for any startup, and here’s why:

  • Growth Engine: Effective marketing fuels growth. It allows you to reach new customers, build brand awareness, and ultimately drive sales. Without a strategic marketing budget, achieving sustainable growth becomes significantly more challenging.
  • Data-Driven Decisions: A sound marketing budget empowers you to make data-driven decisions about your marketing efforts. By tracking and analyzing campaign performance, you can optimize your spending and ensure you’re getting the most out of every dollar invested.
  • Competitive Advantage: In today’s competitive landscape, a strong marketing presence is crucial for standing out from the crowd. A well-allocated marketing budget allows you to develop targeted campaigns that resonate with your target audience and differentiate your brand.

Mantis Funding: Your Partner in Startup Success

We at Mantis Funding recognize the importance of marketing for startup growth. That’s why we offer flexible revenue-based financing solutions that can help you secure the capital needed to invest in your marketing efforts.

With our support, you can:

  • Develop Compelling Marketing Campaigns: Free up capital to launch targeted marketing campaigns that reach the right audience and generate leads.
  • Invest in Marketing Technology: Secure funding to invest in marketing automation tools, analytics platforms, or content creation resources, allowing you to optimize your marketing efforts.
  • Scale Your Marketing Efforts: As your business grows, access additional funding to scale your marketing initiatives and reach a wider audience.

By partnering with Mantis Funding, you can gain the financial flexibility needed to establish a strong marketing foundation and propel your startup toward success.

Marketing Budgets with Mantis

Building a successful startup hinges on a well-crafted marketing budget. But traditional financing options might not always be readily available for young companies. Here’s where Mantis Funding steps in, offering alternative funding solutions like revenue-based financing to empower your marketing efforts.

Benefits of Alternative Funding Solutions for Marketing Budgets

  • Focus on Growth, Not Debt: Unlike loans, revenue-based financing provides capital based on your future sales. This frees you from burdensome debt structures, allowing you to direct more resources toward marketing initiatives that drive growth.
  • Flexible Funding: Mantis Funding understands that marketing needs can evolve. Our revenue-based financing options can adapt to your changing requirements, ensuring you have the capital needed to execute your marketing strategy at every stage.
  • Focus on Your Business: The application process for alternative funding is often simpler and faster compared to traditional loans. This minimizes the time and effort you spend securing funding, allowing you to focus on what matters most – running your business and executing your marketing plan.
  • Alignment with Success: With revenue-based financing, our success is tied to yours. We partner with you to achieve your growth goals, providing valuable guidance and support along the way.


A well-crafted marketing budget is a high priority for any startup — it fuels growth by attracting customers, building brand awareness, and driving sales. But for young companies, traditional financing can be a hurdle.

This is where Mantis Funding comes into focus. We understand the challenges startups face and offer alternative funding solutions, like revenue-based financing, to put your marketing efforts into motion.

Ready to take your marketing budget to the next level?

Contact us today or apply now to discuss your specific needs and explore how our marketing budget solutions can unlock your startup’s full potential.

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About Mantis Funding

Mantis Funding is a business financing solutions firm catering to small and mid-sized business owners in the United States.