How to decide your marketing budget

Decide your marketing budget by starting from the orders you want and working backwards: orders wanted, divided by your close rate, gives enquiries needed; enquiries needed, multiplied by what an enquiry costs you, gives the media budget. Then add the cost of the people doing the work and anything you must produce. The total is the budget.

Start with orders, not with what you can spare

Most owners pick a number they feel comfortable with and hope orders follow. That reverses the logic. A budget is only sensible against a target, because the same ₹50,000 buys very different outcomes depending on what you sell and how well you answer enquiries.

You need four figures. Average order value. Close rate, meaning enquiries that become orders. Orders wanted per month. And cost per enquiry, which is the one you may have to estimate. Our post on calculating cost per lead and acquisition cost shows how to find yours from past spend.

A worked example, clearly illustrative

For example, say you run a modular kitchen business in Pune. An average job brings in ₹3,00,000. Your gross margin is about a third, so each order leaves roughly ₹1,00,000 before overheads. You want five more orders a month.

Those figures are made up to show the sum, not a benchmark for kitchens. Your own numbers will differ, and they may differ a lot.

Now check it against margin. Five orders at ₹1,00,000 each is ₹5,00,000 of margin. If total marketing, media and everything else, comes to ₹60,000 a month, you are spending about twelve per cent of that margin. That is a sum you can defend. If the same sum came to ₹4,50,000, you would know before spending it that the plan does not work.

Split it three ways

The media figure is only one part. A complete budget has three:

• Time. The people doing the work, whether that is your own hours, a staff member or an outside team such as GullySales. We put our fee in writing after the audit, so it is never a default.
• Media spend. What you pay Google, Meta, IndiaMART or a printer. This goes to the platforms, not to the people.
• Production. Photographs, a landing page, a brochure, a video, a catalogue. It is often forgotten, and its absence is why ads send people to weak pages.

Keep them in separate lines. When results disappoint, you will want to know which line failed.

What changes the number most

Two levers move the budget more than anything else, and neither is the amount you spend.

Close rate. If you improve it from one in five to one in four, you need twenty enquiries rather than twenty-five for the same orders. That is a fifth less media spend for nothing but faster replies and better follow-up.

Cost per enquiry. It moves with the channel, the offer and the quality of the page people land on. Searches for "kitchen designer Pune" cost far more per click than a broad Instagram audience, but the people searching are closer to buying. Do not compare channels by cost per enquiry alone. Compare cost per order.

Hold a part back

Do not commit the whole sum in the first week. Spend about two thirds as planned, and keep a third until you see which source is producing orders and not just enquiries. Move the held-back money to whatever is working, and leave the rest unspent if nothing is. This is also how you avoid the usual trap of increasing spend before the leaks are fixed. If lead quality is the problem, fix that before raising the budget.

When to rework the number

Redo the sum when your average order value changes, when your close rate moves for a few months in a row, or when a platform's cost per enquiry rises noticeably. Do it on a date you set in advance, not when one bad week makes you nervous.

A sanity check before you commit

Ask three questions of the final number. Could you afford to lose it entirely if nothing worked? Does it leave enough for the page and the phone to be ready? And do you know, in advance, what you would do if after eight weeks the enquiries were half what you hoped?

If the answer to any is no, shrink the plan before you start. A smaller test with a clear result teaches you more than a big spend with a vague one.

What to do next

Write your four figures on a sheet today, even rough ones, and do the sum. Then compare the answer to what you currently spend. If you would like a second pair of eyes on the numbers and on where enquiries are being lost, the free audit is a 90-minute call, followed by a written, scored report ranked by what to fix first.