Most B2B companies set their marketing budgets by copying last year’s number and adding or subtracting based on gut feel. That might keep finance happy, but it almost guarantees misalignment with growth goals.
The smarter approach is to start with your revenue target and work backward through the funnel math. You don’t need a month-long planning process to do it. With the right inputs, you can build a budget in under half an hour that’s tied directly to outcomes.
Here’s the step-by-step framework we use with clients.
Step 1: Define Your Revenue Goal
This is your anchor point. How much new revenue do you actually need?
Example:
- Current revenue: $20M
- Goal: $24M
- Growth required: $4M net-new
Many teams underestimate here by using “stretch goals” without tying them to actual capacity. Be realistic. The rest of the math depends on this number being achievable, not aspirational.
Step 2: Work Backward to Required Pipeline
Next, translate your revenue goal into the pipeline you’ll need to generate. Use your actual win rate to do the math.
Example:
- Growth goal: $4M
- Win rate: 25%
- Required pipeline: $16M
Common mistake: Teams forget to factor in win rate and assume every deal in the pipeline closes. That’s how budgets get misaligned from day one.
Step 3: Identify Your Average Deal Size
Divide your pipeline goal by the average deal value to determine opportunity volume needed.
Example:
- Pipeline needed: $16M
- Average deal size: $100K
- Required opportunities: 160
Why it matters: If you sell big-ticket services with $500K deals, your marketing can be highly targeted. If your average deal size is $25K, you need far more volume and therefore larger media spend.
Step 4: Map Conversion Rates Across the Funnel
Now you translate opportunities back into lead requirements. This is where many B2B companies hit a wall because they don’t know their actual conversion rates by funnel stage.
Example conversion math: 1,000 MQLs → 200 SQLs → 160 opportunities → 40 closed-won deals
Each funnel stage has a drop-off rate you can measure historically.
Pro tip: If you don’t have historical data, use conservative benchmarks like 10-15% conversion MQL to SQL and 70-80% SQL to opportunity. Better to overestimate volume needed than underbuild your budget.
Step 5: Translate Into Lead Volume Needed
Once you know your conversion rates, you can calculate exactly how many top-of-funnel leads are required.
Continuing the example:
- Needed: 1,000 MQLs over the year
- That breaks down to about 250 per quarter or 85 per month
This makes the budget tangible. You’re not just throwing out a number; you’re tying spend directly to how many people need to enter the funnel.
Step 6: Assign Budget to Each Function
Here’s where most budget planning goes wrong. Budgets get assigned by “channel preference” like events, paid, or content instead of funnel function.
A stronger approach is to split budget by:
Media Spend: Paid channels that drive awareness and MQLs
Martech Costs: Software needed for automation, lead scoring, and attribution
People and Agency Costs: Execution, content, creative, and strategy
Example for a $2M annual marketing budget:
- Media: $1.2M (60%)
- Martech: $300K (15%)
- People/Agency: $500K (25%)
Why this matters: If you spend 80% on media and neglect nurture or enablement, you’ll fill the funnel but won’t move deals forward. Buyer enablement is just as critical as lead generation.
Step 7: Check Benchmarks and Sanity-Check the Math
Even with bottom-up math, it’s worth checking against industry benchmarks.
Typical ranges:
- Most B2B: 7-12% of revenue
- SaaS companies: up to 15% of revenue
- Professional services: closer to 5-8%
If your math says you need 20% of revenue, something’s off. Either your goals are too aggressive or your assumptions need refining.
Build in Flexibility
Markets shift, assumptions break, and campaigns underperform. The best budgets aren’t static. They have room to shift dollars based on results.
A simple rule: hold back 10-15% of budget as a flexible reserve. Reallocate it toward what’s working each quarter. This approach works especially well within a 90-day sprint framework that builds in regular optimization cycles.
Your 30-Minute Budget Planning Checklist
By the time you’re done, you should have:
✓ A clear revenue goal
✓ Pipeline required to hit that goal
✓ Number of opportunities needed
✓ Funnel conversion assumptions
✓ Required lead volume
✓ Budget split by media, martech, and people
✓ Benchmarks checked and validated
That’s a budget you can actually defend—one that ties marketing spend directly to growth outcomes instead of the common planning mistakes that cause budgets to fail.
The Reality Most Finance Teams Miss
Most B2B companies set budgets based on what they spent last year or what percentage “feels right.” Then they wonder why marketing can’t hit growth targets with inadequate funding.
Here’s what actually happens: finance wants lower numbers, sales wants higher results, and marketing gets caught in the middle with impossible math. The budget gets approved, but it’s built on broken assumptions.
The companies that consistently hit their growth targets don’t guess at budget numbers. They build them systematically from revenue goals, using real funnel data and honest conversion assumptions.
Stop Guessing, Start Planning
Growth requires math, not gut feel. When your budget is built backward from revenue goals, every dollar has a purpose and every campaign has clear success metrics.
This isn’t just about getting budget approval. It’s about building a revenue-driven marketing engine that actually delivers the growth your company needs.
Want to see how your current marketing budget stacks up against your revenue goals? Our B2B Growth Audit walks through this exact framework with your specific numbers and shows you where budget reallocation will drive the biggest impact. Get your audit HERE.
