Level Marketing / Articles / Running a business
How to plan a marketing budget: share of revenue vs goal-based
"How much should we spend on marketing?" is one of the questions business owners ask most. There's no universal number, but there are two sound ways to plan a budget. Here are both, along with the cost structure, test and scale periods and a sample monthly table.
Method 1: a share of revenue
The budget is set as a share of revenue or planned revenue. The exact percentage depends on your industry, margin and growth goals: a new business aiming to grow fast usually allocates a larger share than an established company.
- Pro: simple and safe — the budget never exceeds income.
- Con: it isn't tied to a goal, and a new business has no revenue yet.
Method 2: working back from the goal
Work backwards from the number of sales you need.
An example (illustrative numbers):
- The goal is 30 sales a month.
- Lead-to-sale conversion is 10% → you need 300 leads.
- Cost per lead (CPL) is $2 → ad budget = 300 × 2 = $600.
- Add specialist fees and content on top.
Then check: does the gross profit from 30 sales exceed all marketing costs? That's the ROMI calculation. If you don't know your CPL yet, you'll find it during the test period: see our CPL guide.
Cost structure
| Item | What it includes |
|---|---|
| Ad budget | Payments to Meta, Telegram, Google, Yandex and other platforms |
| Specialist or agency | Setup, management, reporting |
| Content production | Photos, video, design, copy |
| Tools | CRM, services and subscriptions |
| Test reserve | Trying new channels, audiences and creatives |
Test and scale periods
- Test (first 1–2 months): a smaller budget, several audiences and creatives. The goal is to find combinations that work and your real cost per lead.
- Scale: increase the budget on winning campaigns step by step. Sharp jumps can make results unstable.
A sample monthly table (illustrative numbers)
| Channel | Goal | Budget | Expected leads | Actual |
|---|---|---|---|---|
| Instagram and Facebook | Leads | $500 | 250 | |
| Telegram | Subscribers and leads | $150 | 50 | |
| Google or Yandex search | "Hot" leads | $200 | 40 | |
| Content (video, design) | Creatives | $250 | — | |
| Test reserve | New ideas | $100 | — | |
| Total | $1,200 | 340 |
Fill in the "Actual" column at the end of the month and reallocate next month's budget based on the results.
Account for seasonality
Demand isn't flat through the year: education centres peak before the academic year, many shops before holidays. Plan the budget month by month and raise it ahead of the peak.
Conclusion
Combine both methods: calculate from the goal and sanity-check against a share of revenue. Update the plan every month based on your advertising report. If you'd like help calculating a goal-based budget, get in touch with Level Marketing.
