How to Set Marketing Budgets As a Startup or Small Business
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Startup founders and small business owners, especially in healthcare fields like therapy practices, often grapple with how much to spend on marketing and where to spend it. A solid digital marketing budget ensures you invest wisely in channels like SEO, PPC, social media, content, and email that drive growth. This step-by-step guide will walk you through setting a practical digital marketing budget, with clear steps, examples, and tools. By the end, you’ll see how a well-planned budget can fuel your practice’s growth and why sticking to it brings big benefits.
A recent survey shows marketing spend varies widely among healthcare practices (annual budgets from $0 to $15,000+). Many small practices spend only a few thousand dollars per year on marketing, while others invest more to drive growth. Your budget should be tailored to your startup’s needs and goals.
Step 1: Define Clear Marketing Goals and Audience
Before you set a budget, know what you want to achieve. Are you trying to attract new patients, keep current ones engaged, or grow local awareness? Be specific, use the SMART framework (Specific, Measurable, Achievable, Relevant, Time-bound).
Ask yourself:
Are you focused on new patients or retention?
Do you need bookings now, or long-term brand visibility?
Who’s your audience (e.g. adults in [Your City] seeking therapy), and where are they online?
Set clear goals like “get 15 new clients in 3 months” or “generate 100 qualified leads this quarter.” This ensures your budget supports real business growth, not guesswork.
Example: If you want 5 new patients each month, and 1 in 5 inquiries becomes a client, you’ll need 25 inquiries monthly. That helps you decide how much to invest in strategies that drive inquiries, like search ads or blog content.
Step 2: Set a Realistic Marketing Budget
Figure out how much you can comfortably spend. Startups often have tight budgets, so aim for an amount that’s affordable but still impactful.
General guide: Startups often put 10–20% of revenue into marketing to grow quickly.
Healthcare practices: Most established clinics spend 1–5% of revenue on marketing. But if you’re just starting out, you may need to invest more to attract patients.
No revenue yet? Base your budget on available funds. For example, decide on a fixed monthly or yearly amount: like $500/month or $5,000/year, to kick things off.
Example: If you expect $100,000 in revenue this year:
5% = $5,000/year ($417/month)
10% = $10,000/year ($833/month)
Choose a number that supports your growth without stretching your finances too thin.
Step 3: Adjust Your Budget Based on Your Practice’s Situation
Every healthcare startup is different. The right budget for you depends on where you are in your journey, what you want to achieve, and how competitive your market is.
New vs. Established
If you’re just starting out, you’ll need to invest more to build awareness and attract patients. Established practices can rely on referrals and repeat clients, but as a new practice, your marketing spend needs to work harder to get you noticed.
Growth Goals
How fast do you want to grow?
Rapid growth - (e.g. doubling your patient base in a year) requires a larger budget to generate leads quickly.
Steady growth - allows for a more modest spend.
Match your marketing investment to the pace you’re aiming for.
Competition & Specialty
In crowded markets, like mental health services in a major city, you may need more budget for ads and SEO just to stay visible. Niche practices or locations with few competitors might need less.
Also think about patient retention:
If patients usually come for short-term care, you’ll need a steady flow of new ones.
Long-term clients reduce the pressure to acquire new leads constantly.
Location Matters
City practices face higher competition and ad costs but have bigger audiences. Rural or suburban areas may require smaller budgets but also face slower demand.
Your Team’s Skills
If no one on your team has marketing experience, you may need to spend more on outside help (freelancers, agencies, or tools). If you have someone who knows digital marketing, you can save money, but still consider their time and workload when planning.
Bringing It All Together
Use these factors to adjust the baseline budget you set in Step 2.
For example:
A new therapy clinic in a competitive urban area with big growth goals may need to spend 10% or more of projected revenue.
A small-town practice with steady referrals and moderate goals might be fine at 5% or less.
The goal is to spend smartly, not just more. Align your budget with your specific situation to make every dollar count.
Step 4: Pick a Budgeting Method That Works for You
Once you’ve estimated how much you can spend, the next step is deciding how to structure that budget. There’s no one-size-fits-all approach, here are four common methods used by startups and small healthcare practices, plus how to combine them effectively.
1. Percentage of Revenue
This method sets aside a fixed percentage of your current or projected revenue for marketing. It’s simple and automatically scales with your business.
Pros: Easy to apply and adjust as revenue grows
Cons: Doesn’t account for specific goals, you might under- or overspend
Common range: Healthcare practices often spend 5–10% of revenue on marketing.
2. Objective-and-Task (Goal-Based) Method
Here, you reverse-engineer your budget. You start with clear goals, then list out the marketing tasks needed to achieve them and estimate the cost of each one.
Pros: Tailored to your goals; no wasted spend
Cons: Time-consuming to plan and may exceed what you can afford
Example:
Website setup: $2,000
SEO content: $500
Professional photos: $300
Google Ads to generate 100 leads: $1,000
Add it all up, this becomes your marketing budget.
3. Competitive Parity
This method involves researching how much competitors (or similar practices) spend and aligning your budget to stay competitive.
Pros: Helps you avoid under-investing in a competitive space
Cons: Hard to find exact numbers, and what works for others may not work for you
Use this more as a reference than a rule, your budget should still reflect your goals and capabilities.
4. ROI-Driven Approach
With this method, you start by asking: What return do I want from my marketing? If you aim for a 4:1 return, and you want to generate $40,000 in revenue, you’d budget $10,000 for marketing.
Pros: Focuses spending on results and efficiency
Cons: Can be tricky for new practices without past data
Think in terms of cost per acquisition. If a therapy client brings in $1,000 in revenue, and you want a 5:1 ROI, you should aim to acquire them for no more than $200.
Blending Methods for a Smarter Budget
Most practices mix these methods. A typical approach is to start with a percentage of revenue as a baseline, then check that number against:
Your actual marketing goals (Objective-and-Task)
Expected returns (ROI method)
Industry benchmarks (Competitive Parity)
If your budget is too low to meet your goals, either raise it or adjust your expectations. If it’s too high relative to potential returns, focus on the channels most likely to deliver results.
Step 5: Identify the Right Marketing Channels (and Estimate Their Costs)
With your marketing budget in place, the next step is choosing where to allocate it. For new healthcare practices, especially therapy clinics, it’s important to focus on digital marketing channels that deliver strong value without stretching your resources too thin. Below is a breakdown of the most relevant channels and how to approach their costs wisely.
Website & Local SEO
A professional, mobile-optimized website is essential. It not only builds trust but acts as the hub for all your digital efforts. SEO ensures your site ranks in local searches like “therapist near me” or “anxiety counselling in [Your City].” This is one of the best long-term investments for visibility.
Website setup: $500–$3,000 depending on whether you DIY or hire a designer
SEO services: $300–$1,000+/month or your own time if handled in-house
Pro tip: Claim your Google Business Profile (free) and optimize it, it’s one of the most effective local SEO actions you can take
Content Marketing
Creating valuable content (blogs, videos, social posts) helps build trust, boost SEO, and educate your audience. It’s especially relevant for therapy practices wanting to show thought leadership or offer helpful advice.
DIY: Time investment only
Freelancers: $100–$300 per blog or video
Tip: Start with 1–2 blog posts per month targeting common concerns your clients face
Google Ads (PPC)
Pay-per-click ads give fast visibility by placing your practice at the top of search results. This is useful if you’re trying to drive inquiries quickly.
Budget: $300–$500/month to start
Average cost-per-click (CPC): $2–$10 depending on keyword competition
Conversion example: If 100 clicks cost $300 and 5 people inquire, even a couple of new clients may cover the cost
Social Media Advertising
Paid ads on platforms like Facebook and Instagram allow precise audience targeting. These are great for boosting awareness and promoting events or special offers.
Suggested spend: $150–$300/month
Reach: Thousands of local users if well targeted
Tip: Use ads to promote specific actions (e.g. booking a session or signing up for a newsletter)
Organic Social Media
Having a presence on social platforms builds credibility. It’s where many clients will first check you out.
Cost: Free, or low-cost if using tools like Buffer or Later to schedule posts
Use: Share tips, behind-the-scenes content, or relevant articles to engage your audience
Note: Consistency matters more than frequency, 1–2 thoughtful posts per week is enough to start
Email Marketing
As you gather inquiries or newsletter signups, email becomes a low-cost way to nurture those leads and build loyalty.
Platforms: Mailchimp, ConvertKit, etc.
Cost: Free to ~$30/month depending on list size and features
Content ideas: Repurpose blogs, send practice updates, or offer mental health tips
Online Directories & Reviews
Listings on platforms like Psychology Today or Healthgrades increase your visibility and trustworthiness.
Listings: ~$30/month for most major platforms
Reputation management tools: May be included in booking or EHR software
Why it matters: Online reviews are one of the most influential factors for new clients
Other Strategies (Optional)
Depending on your strategy, you might consider:
Webinars or online workshops to attract sign-ups
Telehealth promotions if virtual care is a focus
Local influencer partnerships (e.g. wellness bloggers) for brand reach
Only invest here if they align clearly with your goals.
Step 6: Allocate Your Budget Across Channels Wisely
With channels and rough costs in hand, the next step is to divvy up your budget across those tactics. This is where strategy really comes in, you want to allocate funds in a way that reflects your priorities and maximizes ROI.
Start by investing more in channels that are most likely to bring results. If you expect Google Ads to drive most of your new patient inquiries, consider assigning a larger share of your budget around 40% to it. As you test different channels, monitor performance and shift your spending toward what works best.
At the same time, don’t put all your eggs in one basket. Aim for a balanced mix: a portion of your budget for lead-generation (like search and social ads), some for long-term growth (like SEO and content), and the rest for support tactics (like email or listings). Many follow a 70-20-10 split, 70% on proven methods, 20% to scale, and 10% for testing new ideas.
Lastly, keep a small portion of your budget flexible around 10–15% to take advantage of unexpected opportunities or adjust to market changes. If it’s not used, you can always reinvest it in your top-performing channel later.
Here are some tips for smart allocation:
Sample Budget Allocation: To make this concrete, let’s say you decided on a $1,000 per month marketing budget (approximately $12,000/year). An example allocation might be:
Search Ads (Google/Bing): $400/month – targeting key local keywords for therapy services.
Content Marketing & SEO: $250/month – perhaps funding 1-2 blog posts (if outsourcing content) and some SEO tools or freelancer help, plus your own time in value.
Social Media Ads: $150/month – modest Facebook/Instagram ads promoting blog content or an introductory offer.
Email Marketing: $50/month – for an email tool and perhaps occasional design help; mainly a small portion since the focus initially is acquisition.
Online Directories/Listings: $50/month – covering a couple of paid listings (or review management tools).
Contingency/Experimental: $100/month – kept aside for trying new things, like a small campaign on LinkedIn if you target professionals, or boosting the budget on a successful Google ad, etc.
This is just one example, your budget breakdown will depend on your priorities. You might skip social ads and invest more in content, or vice versa. The key is to write down your plan so it clearly reflects your goals. If your main focus is lead generation, more of your budget should go toward direct advertising rather than long-term brand building.
Be realistic with how much you allocate to each channel. It’s better to invest enough in a few key areas than to spread your budget too thin. For instance, $50/month on Google Ads likely won’t generate results, if that’s your limit, consider focusing on lower-cost strategies until you can scale up.
Also, consider timing. You won’t spend the same every month. Some costs, like a website build, happen upfront, while others, like ads or content, are ongoing. Planning for one-time vs. monthly expenses will help you manage cash flow and stay on track.
Step 7: Use Tools to Manage Your Budget
Staying on budget is easier when you have the right tools. Start with a simple spreadsheet, Google Sheets or Excel works well, to plan monthly spend, track actual costs, and adjust as needed. Free templates online, like those from Spendesk, can help you get started.
If you prefer automation, some tools like Asana or Trello (with budget add-ons) or basic accounting software can help. The key is to use something you’ll actually check regularly.
Set up Google Analytics from day one to track what’s working. Knowing which channels bring leads helps you decide where to invest more, and where to cut back.
Track every cost. If you boost a post or run an ad, log it. Set spending caps on platforms like Google Ads or Facebook to avoid going over budget. Use alerts and limits to stay in control.
Lastly, keep your budget flexible. Note any assumptions (like cost per click) and update them as you go. Treat your budget like a living document, not something you set once and forget.
Step 8: Monitor, Measure, and Adjust Regularly
Creating a budget is just the beginning, what matters is how you manage it over time. Regular reviews help you stay on track and make smarter decisions based on real results.
Start by tracking key metrics like leads per channel, cost per lead, conversions to clients, and website traffic. These KPIs show if your spending is actually driving results. Set a monthly review rhythm to compare planned vs. actual spend, and assess performance. For example, if you spent $500 on Google Ads and got 3 new clients, calculate your cost per acquisition and compare it to other channels.
Stay flexible. If a channel underperforms, reduce its budget and shift funds to better-performing ones. Likewise, if a channel is doing well but hitting limits, consider increasing its budget using funds from your contingency reserve. Keep your budget plan updated as you make changes, so you always know where the money is going.
Expect occasional overruns. If you overspend in one area, adjust other parts or balance it out the following month. Just make sure it’s a conscious decision, not a reactive one.
Over time, measure your return on investment, are you on track to meet your original goals? Use these insights to refine your budget for the next quarter or year. As your business grows, your budget should evolve too.
Why a Digital Marketing Budget is a Game-Changer
Creating and sticking to a digital marketing budget might feel like extra work at first, but it’s one of the most powerful tools your healthcare startup can use for long-term success. It brings structure, focus, and clarity to your marketing efforts, something every early-stage practice needs.
A clear budget helps you stay focused and in control. By planning how much to spend and where to spend it, you avoid impulsive decisions and scattered efforts. Instead, you’ll prioritize high-impact strategies that align with your goals. This prevents both overspending and underspending, and ensures every dollar goes toward the channels that matter most. For a startup with limited resources, this kind of discipline is key.
You’ll also see better results over time. Budgeting forces you to set goals and track outcomes, which makes your marketing more data-driven. As you monitor what’s working and what’s not, you can shift funds to higher-performing channels and stop spending on tactics that don’t deliver. This leads to a higher return on investment and helps you continuously improve your approach.
Most importantly, a budget supports steady, sustainable growth. Instead of stopping and starting marketing based on gut feeling, you’ll have a plan that allows you to invest consistently. This builds momentum, strengthens your brand, and ensures a regular flow of new patients. Over time, your marketing becomes a reliable engine for business growth, not an unpredictable cost. And because your spending is planned, your cash flow stays healthier too.
By following the steps in this guide, you’ll be equipped to build a digital marketing budget that fits your practice’s goals, size, and stage. Whether you’re investing in SEO, paid ads, content, or email campaigns, your budget will help you make smart, confident decisions.
At Rex Marketing & CX, we understand that every dollar matters, especially in the early stages of growing a healthcare practice. That’s why we tailor strategies that align with your goals and your budget. Whether you’re ready to launch your first campaign, fine-tune your current approach, or finally get real clarity on where your marketing dollars should go, we’re here to help you make smart, measurable progress, without overspending. Get in touch today and let’s talk about what’s possible within your budget.
