How Much Money Do I Need to Spend on Marketing?

This is a question that is very important to both new computer businesses and established computer businesses. When times get tough for the established businesses, marketing is often one of the first expenses to be cut back when it really should be the last.

So, how much money do I need to spend on marketing? Well, the answer differs from business to business but the short answer is around 5-20 percent. If you chose 20% and you are currently making $50,000 a year, then you plan to spend $10,000 on advertising. Marketing should be treated as a fixed cost like rent that needs to be paid every month because if you stop advertising when you are busy you may fall into the computer advertising trap. Don’t wait until you are desperate because it creates much more pressure for results.

A friend of mine didn’t spend any money on marketing his business because he said “he couldn’t afford it”. This set in motion something much worse than the computer advertising trap, the business death spiral™. Here’s that story which Ive written about in a past article:

Last year a friend of mine brought an internet/lan-gaming cafe in a nearby suburb; this year it went bust. A few months before it went bust I asked him “hows business?” and he said “slow”. I recommended that he put out some more advertising and he responded with “I cant afford it”. This response will make the jaw drop of any business owner who has survived the first two years because they understand how important advertising really is. If one does not have the funds to put out any advertising then it even more important that they do put some out because if they don’t, it will start a cycle of death for the business. If you don’t advertise you wont get more customers, if you don’t get more customers you wont get any money, if you don’t get any money your business will die.

For those of you who are are just starting out you should still spend between 5 to 20 percent of what you realistically think you are going to make. If your budget is low then there are still many cheap ways to advertise your business mentioned in one of our past articles “how to advertise your computer business“.