Sometimes it helps to work backwards!
One of the most common questions business owners ask is: “How much should I spend on online marketing to see results?” . This answer can be found by working backwards, and also starting with understanding ‘Which results matter to you’?
Instead of choosing an arbitrary budget! The smartest approach is to work backwards from the results you need and ensure your business can handle the demand.
Step 1: Understand Your Business Capacity
Before setting a marketing budget, ask yourself:
- What is my maximum production capacity?
- Can my team handle a surge in orders?
- How quickly can I fulfill and ship products?
- How many downloads of my album or creative product/podcast am I trying to generate weekly?
For example, if you sell handmade candles and can only produce 1,000 candles per week, generating 2,000 orders would create production bottlenecks, shipping delays, and customer dissatisfaction. Your marketing budget needs to align with what your business can realistically fulfil, not just how much demand you want to create.
Step 2: Calculate Your Target Cost per Sale (CPA)
Your cost per acquisition (CPA) must be lower than your profit per sale for marketing to be sustainable. For instance:
- Your candle sells for £10.
- Your production, dispatch and operational costs per candle are £5.
- That means you have £5 profit per sale.
If your ad spend is £2 per sale, you’re still making £3 profit per candle—which is scalable. But, if you’re spending £6 per sale, you’re actually losing money. This is critical before deciding a monthly or weekly ad spend budget. Check out or conversion calculator to understand business profitability.
Step 3: Set a Monthly Budget Based on Profitability
Using the candle example, let’s say your goal is to sell 1,000 candles per week and your advertising generates sales at £2 per acquisition:
- Weekly ad spend = 1,000 candles x £2 CPA = £2,000
- Monthly ad spend = £8,000
If your conversion rates stay consistent, this budget makes sense because it aligns with:
✔️ Your production capacity
✔️ Your profit margins
✔️ Your target cost per sale
Step 4: Adjust Budget Based on Performance
Online marketing isn’t static—your cost per sale (CPA) will fluctuate based on:
✅ Ad targeting & audience refinement
✅ Seasonal trends
✅ Competitor activity
💡 Tip: Start with a test budget, track your results, and adjust accordingly. For example, can you start by spending £100 and making 50 sales? Bare in mind sometimes ads become more effective at scale, so if they cost slightly more when spending small, don’t worry too much.
Final Thoughts: There’s No One-Size-Fits-All Budget
Your online marketing budget should be based on:
🎯 Your profit per sale
🎯 Your production capacity
🎯 Your target cost per sale
By working backwards from your goals, you ensure that you know how much to spend on online marketing for results which are both profitable and scalable.
📌 Next Step? Track your CPA, conversion rates, and ROI—then adjust your budget to maximise results. Now you have a rough idea of your monthly ad spend, the next step will be to try and optimise that spend by working towards a lower CPA.
