Opinions expressed by Entrepreneur contributors are their own.
Key Takeaways
- Anchor your marketing budget at 10% of projected gross sales, not last year’s revenue, because you can’t market into the past.
- Split that budget 70/20/10 — 70% to what already works, 20% to promising bets and 10% to true experiments — and rebalance every quarter so proven winners keep climbing into your biggest bucket.
Most marketing budgets are built once and then quietly forgotten. You set the number in January, spread it across the same channels you used last year and check back in December to see how it all went. By then, it’s too late to fix anything. The market moved, your best channel got more expensive and the experiment you were curious about never got funded.
I’ve watched a lot of business owners run their marketing this way, and it almost always produces the same result: a budget that slowly goes stale. The money keeps flowing to whatever worked two years ago, while the opportunities that could actually grow the business sit on the sidelines because nobody set anything aside to chase them.
There’s a better way to think about it, and it comes down to two decisions — how much to spend and how to divide it up.
Start with one number: 10% of projected gross sales
Before you split anything, you need a total. My favorite starting point is 10% of your projected gross sales for the coming year.
Notice the word projected. You’re not budgeting off last year’s revenue, because last year is over and you can’t market into the past. You’re budgeting based on where you intend to be 12 months from now. If you expect to do $2 million in sales, you’re working with a $200,000 marketing budget.
10% is a deliberate number. The U.S. Small Business Administration recommends 7% to 8% of revenue for most small businesses, and Gartner’s 2025 CMO Spend Survey found companies spending an average of 7.7%. I like 10% because it’s a growth number, not a maintenance number. If you want to take market share rather than just hold your ground, you have to be willing to spend a little more aggressively than the company down the street.
If 10% feels like a stretch right now, start lower and build toward it. The point isn’t the exact figure — it’s that you’ve committed to a real number tied to where the business is headed.
The 70% protects what already works
Once you have your total, divide it into three buckets: 70%, 20% and 10%.
The biggest bucket — 70% — goes to what’s already working. These are your proven channels, the ones where you can draw a straight line from dollars in to customers out. Maybe that’s paid search, maybe it’s email, maybe it’s a referral program that quietly outperforms everything else.
Say you run a home-services company and Google Ads brings you a steady stream of booked jobs at a price you’re happy with. That’s a 70% channel. You don’t get cute with it. You fund it fully, you keep it running and you protect it, because it’s paying the bills while the rest of your budget goes looking for the next thing.
The mistake I see owners make is robbing this bucket to chase something shiny. Don’t. The 70% is the foundation on which everything else stands.
The 20% feeds your promising bets
The middle bucket — 20% — goes to the channels that are showing promise but haven’t fully proven themselves yet.
This is where scaling happens. Maybe you ran a small test on a new social platform last quarter and the early numbers looked good. Maybe a content series is starting to bring in leads, just not yet at the volume of your main channels. These are bets worth pressing — pouring a bit more fuel on the fire to see if they can graduate into the 70%.
This bucket is what keeps your budget from going stale, because it’s constantly promoting your best experiments into proven performers. Channels move. The paid platform that prints money today will get more crowded and more expensive over time, and you want a pipeline of contenders ready to take its place.
The 10% funds the experiments
The smallest bucket — 10% — is for true experiments. This is your permission to try things with no guarantee they’ll work.
A new ad format. A platform you’ve never touched. A creative idea that might flop. Most of these won’t pan out, and that’s fine — that’s exactly what the 10% is for. You’re buying information and the occasional breakout winner.
Here’s why this bucket matters even though it’s the smallest: every channel in your 70% started as an experiment. Somebody funded it before it was proven. If you never spend on the unproven, you run out of new things to scale, and a few years down the road your budget is built entirely on aging channels. The 10% is how you keep feeding the machine.
How to keep the split honest
A 70/20/10 budget only works if you actually revisit it. I like to review the split every quarter, not once a year.
Each quarter, ask a simple question of every channel: Is it earning its bucket? A 10% experiment that’s working gets promoted to the 20%. A 20% bet that proved itself moves into the 70%. And anything in the 70% that’s quietly declining gets demoted or cut, which frees up money for the next contender.
Track this with real numbers — cost per lead, cost per sale and return on what you spent. You don’t need a fancy dashboard. You need to know which dollars are producing customers and which ones aren’t.
That’s the whole system. Start with 10% of projected gross sales, split it 70/20/10 and rebalance every quarter so your best experiments keep climbing toward your biggest bucket.
Do that, and your marketing budget stops being a number you set and forget. It turns into a living thing that gets a little smarter every quarter — and so does your business.
Key Takeaways
- Anchor your marketing budget at 10% of projected gross sales, not last year’s revenue, because you can’t market into the past.
- Split that budget 70/20/10 — 70% to what already works, 20% to promising bets and 10% to true experiments — and rebalance every quarter so proven winners keep climbing into your biggest bucket.
Most marketing budgets are built once and then quietly forgotten. You set the number in January, spread it across the same channels you used last year and check back in December to see how it all went. By then, it’s too late to fix anything. The market moved, your best channel got more expensive and the experiment you were curious about never got funded.
I’ve watched a lot of business owners run their marketing this way, and it almost always produces the same result: a budget that slowly goes stale. The money keeps flowing to whatever worked two years ago, while the opportunities that could actually grow the business sit on the sidelines because nobody set anything aside to chase them.
There’s a better way to think about it, and it comes down to two decisions — how much to spend and how to divide it up.
