Defining an Effective Marketing Budget for SMEs: Concrete Strategies and Practical Tips

In a context of increased competition and rapidly evolving acquisition channels, defining a clear and well-adapted marketing budget is a key lever to ensure the growth and profitability of an SME. Too often confused with the communication budget, the marketing budget is broader, encompassing all actions aimed at attracting, converting, and retaining customers.

1. Why Talk About a Marketing Budget, and Not Just Communication?

Marketing includes:

• Acquiring new customers
• Increasing sales
• Positioning, pricing, channels, promotion
• Market analysis and customer experience

It includes communication, but is not limited to it. A well-designed marketing budget is directly aligned with your business objectives.

2. Key Components of a Marketing Budget

• Advertising (digital, traditional, local)
• Content creation (SEO, blogs, videos, visuals)
• Newsletters and CRM tools
• Website, SEO, UX/UI
• Trade shows and events
• Marketing automation
• Training or external consultants

3. How to Estimate a Realistic Marketing Budget?

Start by setting clear objectives, such as increasing website traffic, booking appointments, generating leads, and growing a local customer base. Your goals will directly influence the level of investment required.

However, be mindful: your company’s actual financial situation must also be taken into account. A startup, a fast-growing business, or one in recovery won’t be able to allocate the same budget as a mature and stable company. The goal is not to copy market averages, but to set a budget adapted to your current means and investment capacity. Our marketing experts can support you in this process.

Some SMEs allocate less than 2% of their revenue to marketing. Yet by doing so, they often miss the opportunity to invest in business development and suffer from chronic underfunding. Too often, marketing is still seen as an expense rather than what it truly is: a strategic lever for sustainable growth.

Then, Take Inspiration from Industry Practices

For example, according to a study by BDC, Canadian SMEs invest on average:

• In B2B, between 2% and 5% of their revenue in marketing
• In B2C: between 5% and 10%, as they often need to use more channels to reach various segments

📊 What Canadian SMEs Invest on Average

• Less than $2M in revenue: about $34,000/year on digital marketing (website, online advertising)
• Between $2M and $10M: about $76,000/year
• Over $10M: more than $230,000/year

These figures may include website design, SEO, online advertising, content creation, and digital tools. Source: BDC

Here is an indicative chart to help you position yourself according to your growth goals. From there, you can estimate your budget as a percentage of your annual revenue.

4. Optimize Every Dollar Invested

• Track key metrics: Cost Per Click (CPC), Cost Per Lead, Conversion Rate, Return on Ad Spend (ROAS)
• Prioritize reusable content (videos, articles, guides)
• Use A/B testing and iterate on campaigns.
• Automate wherever possible

5. Frequency and Adjustments

• Review your budget every quarter.
• Shift resources toward the most effective channel.s
• Keep a margin of flexibility to test a new tactic.s

6. Marketing as a Value Driver for the Business

A well-structured marketing budget is not an expense but an investment.

• It increases the company’s value.
• It professionalizes customer acquisition.
• It facilitates a future sale or business transfer.

Conclusion

Defining a marketing budget is not just “putting a number in an Excel cell.” It means building a strategy aligned with your ambitions, capabilities, and mid-term goals. Whether you aim to stabilize your business or accelerate its growth, one thing is sure: you need to master your marketing investments to turn them into a sustainable competitive advantage.

👉 Need more clarity? Try our free online diagnostic to identify your marketing priorities.