Free tool

Marketing Budget Calculator: Plan From Your Revenue Goal

Seed Light built this free marketing budget calculator to help you set a budget. It uses your growth target, customer value and gross margin, instead of picking a number and hoping.

Enter last year's sales and the growth you want, and see the monthly spend that target needs.

Your business and your target

Your sales in the last year

The whole business, not one channel.

How much do you want to grow this year

Enter the growth scenario you want to model.

What a customer is worth to you in a year

Average spend multiplied by how often they buy.

Out of every 100 in sales, how much is gross profit

The margin left after the direct cost of delivering the product or service.

What it costs you to win one customer

Marketing spend divided by new customers. Guess if you have to.

Your result

Enter your numbers and your result will appear here. The calculation runs in your browser.

Talk through your result

Book a free 15-minute call and we will help you read the numbers and decide what is worth improving first.

We record the result band you reach, not the numbers you enter.

Free to use, with no sign up. The calculation runs in your browser, so the values you enter are not sent to our server or stored.

The maths

How this calculator works

01
Start with the growth you want
Your sales multiplied by your growth target. That is the extra revenue the marketing has to produce this year.
02
Turn it into customers
The extra revenue divided by what a customer is worth in a year. This is the number of new customers the target really means.
03
Price those customers
Customers needed multiplied by what it costs to win one. That is the yearly budget, and dividing by twelve gives the monthly number.
04
Then check it against gross profit
Customer value is multiplied by your gross margin, and that gross profit is compared with the cost of winning one customer. Comparing against revenue instead flatters a low margin business, because most of that revenue is already spoken for.

A worked example

A services business wants to grow one fifth this year. Money is shown in units so the shape stays clear. Example only. Replace these assumptions with your own numbers.

Sales last year: 600,000 units
Growth target: 20 percent, so 120,000 units of extra sales
Customer value in a year: 2,100 units
Gross margin: 45 in 100, so 945 units of gross profit a customer
New customers needed: 57.1
Cost to win one: 300 units
Budget: 17,143 units a year, about 1,429 a month
Share of sales going to marketing: About 2.9 in 100
Gross profit against cost to win: 3.15 to 1, leaving 645 units a customer before overhead

See how we plan marketing

Straight answers

Common questions

Common questions about the calculation and how to use the result.

The common rule of thumb is five to ten in each hundred for an established small business, and more while you are growing fast or entering a new market.

Divide last year's total marketing spend by the number of new customers won during the same period. Use only costs and customers from matching dates. If the records are incomplete, label the result as an estimate and update it when better data is available.

Build costs are usually treated as a one off investment rather than part of the monthly budget, while hosting, care and ongoing improvements sit inside it.

The tool uses gross profit because marketing has to be paid from what remains after fulfilling the sale, not from all revenue collected.

A universal target ratio does not exist. The ratio a business can carry depends on its overheads, how long the customer stays and how quickly the cash comes back, so those factors must guide how you assess the figure.

Customer value matters more than the first order value when later orders cost almost nothing to win. Review the value across the customer relationship against your current figures, rather than judging the marketing budget from the initial purchase alone.

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