Promotional Budget

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DEFINITION of 'Promotional Budget'

A specified amount of money set aside to promote a business' or organization's products or beliefs. Promotional budgets are created to anticipate the essential costs associated with growing a business or maintaining a brand name. The budget is often set according to a percentage of sales or profits in order to maintain the intended growth rate.

BREAKING DOWN 'Promotional Budget'

Advertising and promotion of a business is a cost which most businesses have a tough time predicting, which is why a percentage method might be used. If new product lines are set to release in the near future, the budget could be increased. High promotional budgets cut into profits in the period of use and are intended to increase sales or awareness in the future.

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