Guide · How-to
How to set a marketing budget for a small business
Most Kerala SMBs underspend on marketing (5-8% of revenue) when they should be at 10-15% if growing. The right budget depends on growth stage, gross margin, and competitive context — not industry averages.
When to read this:Read this when planning your annual budget or when deciding how much to spend on a specific marketing engagement.
The steps
How to do it.
- 1
Calculate current marketing spend honestly
Add: agency fees, ad spend, content/design costs, marketing tools, marketing team salaries (loaded cost), and founder time spent on marketing (estimate at ₹2K/hour). Most SMBs underestimate their real spend by 30-40%.
- 2
Compare to revenue + growth target
Marketing spend as % of revenue: 5-7% = maintenance mode (you're holding share, not growing). 8-12% = healthy growth. 13-18% = aggressive growth. 18%+ = startup mode (sacrificing margin for growth). Pick the bracket that matches your goal.
- 3
Allocate by channel based on customer journey
Typical SMB split: 40% Be Found (SEO + HEO + content), 35% Be Bought (paid + funnel + automation), 15% Be Chosen (brand + social + reviews), 10% Be Built (one-time projects like rebrands). Adjust based on where you are in the journey.
- 4
Plan in 90-day chunks
Don't commit a year's budget at once. Plan in 90-day sprints (the same horizon Adsomia uses). Each 90 days: review what worked, reallocate, double down on winners. This is how you stop pouring budget into channels that don't compound.
- 5
Reserve 10% for tests
Always keep 10% of marketing budget for testing new channels (e.g., trying TikTok, a new tool, a different agency for a specific project). Without this, you're stuck in whatever worked 2 years ago — which probably doesn't work now.
Red flags
What to avoid.
- Setting marketing budget as % of profit instead of revenue (always too small)
- Cutting marketing first when revenue dips (almost always wrong — you need MORE visibility when sales are slow)
- Spending 100% on paid ads with no investment in compounding channels (SEO, content, brand)
Where Adsomia fits
Our honest take.
Adsomia's outcome sprints fit cleanly into 90-day budget cycles. Founding-client offers range ₹1.65L-3.9L per outcome — designed to be one quarter's marketing spend for an SMB doing ₹2-15Cr/year revenue.
Common questions
FAQs.
What's a typical Kerala SMB marketing budget?
₹15K-2L/month for businesses doing ₹50L-5Cr/year revenue. Below that range you're under-investing; above it you're either growing aggressively or scaling beyond SMB stage.
Should I pay for SEO when I can do ads?
Both serve different purposes. Ads = immediate visibility + sales (stops when budget stops). SEO = compounding visibility (keeps working after you stop investing). Most healthy SMB budgets do both with a 60/40 split favouring ads if you're scaling fast, 40/60 favouring SEO if you're building durably.
Can I just do free marketing (organic social, etc.)?
You can — but the time cost is your hidden budget. Founder time spent making reels is ₹X less time spent on the business. Calculate the trade-off honestly.
Want help applying this to your business?
30-min discovery call. We listen first; written scope inside 48 hours; first deliverable in 14 days.