Marketing creates revenue, but figuring out the right budget is a stressful challenge.
You don’t want to overspend compared to your cash flow… but underspending can also cause your return to be not worth the investment.
Easy 2-step marketing budget calculator:
The U.S. Small Business Administration recommends 7-8% of total revenue be spent on marketing. I’ve also heard smarter people than me say “5% to keep your business running, 10% to grow your business”
So, both as a practice owner and now for Practice Promotions, this is what I find to work best:
- Set up a spreadsheet with current revenue & expected over the next 3 months.
- For each month, calculate 7-10% of total revenue depending on if your goal is to grow aggressively or you are trying to stay about the same.
- Repeat this process every quarter.
For example, let’s say a clinic averages just over $83,000 per month ($ 1 million annually) and is trying to achieve a moderate growth level:
| EXAMPLE | Month 1 | Month 2 | Month 3 |
| Expected revenue: | $83,000 | $83,000 | $83,000 |
| % | 8% | 8% | 8% |
| Marketing budget: | $6,640 | $6,640 | $6,640 |
Statistically, underspending is MUCH more common for PT clinics than overspending. But the beauty of this system is you don’t have to have a huge budget, you just have to plan the right percentage.
Is there an easier way to do this?
Yes!
Let us help you with the math. Our parent company, Practice Promotions, created an interactive Practice Marketing Budget Calculator that takes your revenue and your practice goals into account and returns the ideal budget. Go check it out!
Remember, budgeting is NEVER about guesswork. You can be confident in your marketing spend with this simple formula!
