Young Companies and Marketing Budgets

Lots of small business owners who are just starting out ask me how to determine the proper amount of money to budget for marketing. Most young companies must rely on what some people call “bootstrapping.” This is where you re-invest a large portion of your profits to keep things growing. Combining this with social media – which is free and extremely effective – allows many start-ups to keep their heads above water.

In the early days of my company, we were just like a lot of other newly-established small businesses in many regards. We didn’t have a lot of cash coming in, and the budget was minimal. We had to make every dollar we spent work very, very hard. In fact, we used a ratio of 10 percent dollars to 90 percent sweat equity.

Sweat equity means doing something physically that’s pushing your message out in front of people. Back then, I must have spoken to every Rotary Club, Kiwanis Club and Sunday school class out there. None of them paid me a dime, but I was there every time someone would allow me to present to their group. Even though these little speaking gigs didn’t create a direct income, it gave me numerous opportunities to get the word out about who we were and what we offered. With time, and a lot of work, those little opportunities really got the ball rolling. We’re still enjoying the momentum they created today.

Go slow, and take time to learn about what’s effective in your particular field. Don’t waste what little marketing budget you have on one or two expensive options that don’t work!

Dave Ramsey

Dave Ramsey is considered by many to be America’s trusted voice on business and money. He is also CEO of Ramsey Solutions and has authored a number of best-selling books, including EntreLeadership. The Dave Ramsey Show is heard by more than 11 million listeners each week on more than 550 radio stations and digital outlets. Follow Dave on the web at

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