How much should you spend on marketing?
The most common starting point is the percentage-of-revenue method: pick a share of revenue to reinvest in marketing, and let that scale with the business.
Marketing budget = Annual revenue × Marketing %
At $500,000 in revenue and a 10% allocation, your annual budget is $50,000 — about $4,167 per month. This calculator breaks that down into annual, monthly, and weekly figures so you can plan campaigns against it.
For a full step-by-step method that works backward from revenue targets and CAC, read How to Set a Marketing Budget.
How to calculate a marketing budget (step by step)
Use this when someone asks "how do we get a number?" — not just a rule of thumb:
- Start with annual revenue — actual trailing twelve months, or a realistic forecast for the year you are planning.
- Pick a marketing % — use the benchmarks below by business type (B2B vs B2C vs growth-stage ecommerce).
- Multiply: revenue × % = annual marketing budget.
- Divide by 12 for monthly planning (this calculator does that automatically).
- Sanity-check against CAC: divide the annual budget by your CAC to see how many new customers the budget could buy at current efficiency.
Worked example: DTC ecommerce brand
A Shopify store expects $600,000 in revenue this year and plans to spend 12% on marketing (typical for a growth-stage DTC brand):
- Annual budget = $600,000 × 12% = $72,000
- Monthly budget = $72,000 ÷ 12 = $6,000/month
- If blended CAC is $85, $72,000 could fund roughly 847 new customers per year at current efficiency — before salaries, tools, and creative that also belong in a fully-loaded CAC.
If that customer count is far below your growth target, either raise the percentage, improve conversion and ROAS to lower CAC, or accept that the budget is a ceiling you will not hit. When reporting results to leadership, pair this budget with the right metric — see ROAS vs Marketing ROI for choosing between the two.
What percentage is right?
There's no one answer, but well-known rules of thumb help. Established B2B companies often spend a smaller share of revenue on marketing than B2C, because their deal sizes are larger and sales cycles longer. Younger or growth-stage companies typically spend a higher percentage to buy market share, while mature businesses optimize toward efficiency. Use the benchmarks below as a sanity check, then adjust based on your margins and growth goals.
Use it as a ceiling, not a target
A budget is a constraint that forces prioritization — not a number you must exhaust. Once you've set it, allocate against your most efficient channels first (check your ROAS and blended ROAS before pouring budget into any single platform), and keep a test pool of 10–20% for new channels and creative.
Sanity-check budget against returns
A 10% budget on $500k revenue is $50k/year — about $4,167/month. If your average CAC is $200, that buys roughly 250 customers per year at full efficiency (before overhead). If CAC is $400, the same budget only buys 125. Run this check so your percentage-of-revenue target matches realistic acquisition volume, not just a spreadsheet rule.
Also check marketing ROI on major campaigns — a budget can look reasonable on paper but fail if returns do not cover product cost and overhead.
Budget by business stage
Startups and growth-stage brands often run 10–20%+ of revenue to buy market share — acceptable when LTV:CAC stays above 3:1. Established B2B companies typically spend 2–5% because deal sizes are large and sales cycles are long. Mature B2C brands often land at 5–10%, optimizing toward efficiency rather than raw growth. Pick the band that matches your stage, then adjust monthly based on channel ROAS.