We’re at the start of a new year, which means it’s the perfect time to reevaluate your marketing efforts, carefully analyse what has been working and what hasn’t, and look for new ways to engage new clientele and expand your business. Unless, of course, you’re 100% content with repeating the same outcomes as last year.

This isn’t news to most of you, but AI will continue to open doors for scaling up and increasing operational efficiency in 2024. Very likely at a much faster pace than we saw in 2023. The problem is, more AI-generated content means a bigger battle for everyone’s attention. According to Taradel’s marketing research, 94% of small businesses are planning to increase their marketing expenditures in 2024.

Before we get into where to spread the word about your business this year, let’s first take a look at how much you should be spending on marketing. Because, as the saying goes, you’ve got to spend money to make money.

The right marketing budget for achieving growth

How much you invest in marketing really depends on the stage of your business, the specific industry you operate in, and how quickly you’re looking to grow. According to Gnuworld, South African SMEs should dedicate roughly 7% to 8% of their sales revenue to marketing efforts.

Refract breaks it down even further based on your business’s size:

  • Less than R5 million: 7% to 8%
  • R5 to R10 million: 6% to 7%
  • R10 to R100 million: 5% to 6%
  • R100 to R300 million: 3% to 5%
  • More than R300 million: 3% to 4%

This means that as a small business, you should be spending 7-8% of your top line on marketing. However, keep in mind that this is only if you want to maintain your current size. That’s the catch.

So, how much should you be spending if you want to grow?

Typically, for B2C businesses, it’s recommended to set aside at least 10% of your annual revenue towards marketing. If you’re gunning for faster growth, you’ll need to put in a bit more.

Where does this 10% actually go?

While the best marketing strategies include a combination of digital and traditional strategies, small businesses are currently heavily centred on social media and many of them hire their dedicated social media managers.

In a 2022 survey conducted by Visual Objects, it was found that 70% of small businesses allocate a portion of their budgets specifically for social media marketing. More than a quarter of these companies are putting anywhere from 10% to 30% of their advertising budgets into social media platforms.

Run and grow your small business with working capital from Bridgement

Once you’ve figured out your marketing budget, which covers expenses like your freelance social media manager’s retainer or your marketing manager’s salary, software, and more, the next step is to secure the necessary funding to make it all happen.

For many small businesses, especially those in the informal sector, bank loans are the number one option but accessing them is quite hard. You need to keep in mind that even when banks show interest in lending you the money, the demands for collateral, guarantees, and occasionally substantial down payments can be extremely overwhelming.

If you’re seeking funding, be it for marketing or any other needs, Bridgement’s fast working capital solutions are designed to fuel the growth of your business without straining your cash flow. Apply online in just 2 minutes and gain access to up to R5 million in business funding within 24 hours.