# Marketing Budget Framework — $1K/Month
**Prepared:** 2026-02-20
**Author:** Harper (Finance/Legal)

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## 1. Budget Allocation

### Recommended Ramp Schedule
| Month | Budget | Rationale |
|-------|--------|-----------|
| Mar 2026 | $500 | Validate — first hires prove model works before full spend |
| Apr 2026 | $700 | Scale what's working, cut what isn't |
| May 2026+ | $1,000 | Full budget once ROI is proven |

### Allocation by City (at $1K/month)
| City | Budget | % | Rationale |
|------|--------|---|-----------|
| Sydney | $300 | 30% | Home market, existing leads, continue momentum |
| Newcastle | $200 | 20% | Low competition, organic growth likely, less spend needed |
| Melbourne | $400 | 40% | Largest market, most competitive, needs more investment |
| Reserve/Testing | $100 | 10% | A/B testing, opportunistic spend |
| **Total** | **$1,000** | **100%** | |

### Allocation by Channel (suggested)
| Channel | Budget | Notes |
|---------|--------|-------|
| LinkedIn Ads (targeted) | $400 | Construction company decision-makers |
| Google Ads (search) | $300 | "hire tradies Sydney/Melbourne/Newcastle" |
| Content/SEO | $0 | Herald handles this (no paid spend) |
| Direct outreach tools | $200 | Apollo, Twilio SMS (existing subs cover most) |
| Reserve | $100 | Testing new channels |

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## 2. ROI Thresholds

### Minimum Acceptable ROI
| Metric | Threshold | Calculation |
|--------|-----------|-------------|
| **Cost per hire (CPH)** | <$50 | Marketing spend ÷ hires attributable |
| **Break-even CPH** | $48.80 | Net revenue per hire — spending more than this per hire = losing money |
| **Target CPH** | <$25 | 50% margin on marketing spend |
| **Payback period** | <30 days | Marketing dollar → hire within 1 month |

### ROI by Scenario
| Monthly Spend | Hires Needed to Break Even on Marketing | Target Hires (2x ROI) |
|---------------|----------------------------------------|----------------------|
| $500 | 11 hires | 21 hires |
| $700 | 15 hires | 29 hires |
| $1,000 | 21 hires | 41 hires |

### Kill Criteria — When to Cut Spend
- **CPH > $50 for 2 consecutive months** → channel is unprofitable, cut or pivot
- **No attributed hires from a channel in 30 days** → reallocate budget
- **Total marketing ROI negative for 3 months** → reduce to $500 and reassess
- **Runway drops below 18 months** → immediate cut to $300/month essentials only

### Scale Criteria — When to Increase
- **CPH < $20 sustained** → consider increasing to $1,500 (request Michael's approval)
- **Hires growing >20%/month** → demand is there, invest to capture
- **Revenue > burn rate for 2 months** → reinvest excess into marketing

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## 3. Tracking Requirements

### Weekly (Susan + Harper)
- Hires per city per channel
- Marketing spend to date vs budget
- CPH by channel

### Monthly (Harper delivers to Michael)
- Full marketing ROI report
- CPH by city and channel
- Recommendation: scale, maintain, or cut by channel
- Runway impact of actual spend vs projected

### Attribution
- Every hire should be tagged with lead source (outreach, organic, referral, ad)
- Susan tracks lead source in CRM
- I track cost per lead source for ROI calculation

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## 4. Runway Impact Model

### Conservative (Full $1K/month from day one)
| Month | Balance | Burn | Revenue | Net | Runway |
|-------|---------|------|---------|-----|--------|
| Mar | $24,408 | $1,700 | $244 | -$1,456 | 15.8 mo |
| Jun | $19,940 | $1,700 | $1,171 | -$529 | 37.7 mo |
| Sep | $18,352 | $1,700 | $2,050 | +$350 | ∞ |

### Recommended (Gradual ramp)
| Month | Balance | Burn | Revenue | Net | Runway |
|-------|---------|------|---------|-----|--------|
| Mar | $24,408 | $1,200 | $244 | -$956 | 24.5 mo |
| Jun | $21,540 | $1,400 | $1,171 | -$229 | 94+ mo |
| Sep | $20,853 | $1,700 | $2,050 | +$350 | ∞ |

**The difference:** Gradual ramp keeps runway above 18 months at all times. Full spend from day one dips to 15.8 months in March — uncomfortably close to the danger zone with zero proven revenue.

### ⚠️ RECOMMENDATION TO MICHAEL
Start at $500/month in March. Prove the model generates hires. Scale to full $1K only after first 5+ paid hires confirm product-market fit. This protects runway while still enabling growth.

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*"Don't spend $1,000/month to find out what $500/month would have told you."*