Practical channel allocation for capital-constrained companies with $500K-$3M ARR
The Problem: You have $100K for marketing this year. Spend it wrong and you've burned 6-12 months of runway proving nothing. Every dollar needs to work.
The Solution: 70% on one proven channel. 20% validating one new channel. 10% on foundation (tools, basic content). Cut ruthlessly every 90 days based on actual CAC and retention data.
The Impact: Know within 90 days if your money is generating traction. Clear kill/continue decisions every quarter. No budget wasted on "brand awareness" or channels that can't prove ROI.
Implementation: Month-by-month spend allocation with specific KPIs and decision triggers for each channel.
Capital-constrained companies spread their budget across 6 channels and prove nothing about any of them.
You've got $100K for the year. Your advisor says "diversify your channels—don't put all your eggs in one basket." So you allocate $1,500/month to LinkedIn ads, $1,000/month to Google Search, $2,000/month to content, $1,500/month to a part-time contractor, and $1,000/month to tools.
Six months later: You have data on everything and clarity on nothing. LinkedIn generated 12 leads at $750 each. Google got 8 at $900 each. Content produced 47 blog posts that drove 4 form fills. None of the channels have enough volume to know if they actually work.
Now you're $50K in with no clear winner and no idea what to do next. Double down? Cut it all? Try something new? You're guessing.
The brutal reality: With $100K/year, you can afford to prove ONE channel works, maybe validate a second. That's it. Spreading thin guarantees you'll learn nothing actionable before your cash runs out.
Concentrate fire. Prove one thing. Then expand.
What it is: The one channel that's already shown early signal—even if it's not scalable yet
How to pick it: Where did your last 10 customers actually come from? That's your 70%.
Allocation:
Success metric: CAC under $2,000 and 30-day retention above 40% within 90 days
Kill trigger: If CAC is still above $3,000 after 90 days with 30+ customers acquired, kill it and move the budget
What it is: Testing the second-best hypothesis for where your customers might be
How to pick it: Ask your 70% channel customers "Where else do you hang out professionally?" Test that.
Allocation:
Success metric: Prove it can generate leads under $3,000 CAC by Month 3
Kill trigger: If no meaningful leads (<10) or CAC above $4,000 by end of Month 3, shut it down immediately
What it is: Minimum viable tools and content to not look incompetent
Allocation:
Success metric: Prospects don't bounce because your site looks empty or broken
Don't allocate here: Brand design, rebranding, video production, webinars, events, swag, brand awareness campaigns
The math: $70K focused on one channel is enough to run real tests. $20K is enough to validate if a second channel has legs. $10K keeps the basics running. That's your entire $100K—ruthlessly focused.
Don't guess. Follow the signal you already have.
| If Your Last 10 Customers Came From... | Your 70% Channel Is... | Monthly Budget Breakdown |
|---|---|---|
| Founder direct outreach on LinkedIn | Scaled LinkedIn outbound | $3K SDR/VA + $1,500 LinkedIn automation + $800 enrichment tools + $500 founder time |
| People searching "[problem] solution" on Google | Google Search Ads | $4,500 ad spend + $1,000 landing page testing + $300 tools |
| Your content/blog posts | SEO content engine | $3,500 experienced writer + $1,500 link building/distribution + $800 SEO tools |
| Partner/integration referrals | Partner program | $4,000 partnerships lead + $1,500 co-marketing/enablement + $300 partnership CRM |
| Community (Slack, Discord, Reddit) | Community-led growth | $4,000 community manager + $1,200 sponsorships + $600 tools |
| Customer referrals | Referral program | $3,000 referral incentives + $2,000 program management + $800 referral software |
Critical rule: If your last 10 customers came from 6 different places with no clear pattern, you don't have a 70% channel yet. Spend $0 on paid marketing and spend 100% of your time talking to customers to figure out the pattern first.
Evaluate ruthlessly every quarter. Kill what's not working. Double down on what is.
By month 9, you should have 75+ total customers and clear CAC data. Decision point:
What not to do: "Let's give it one more quarter to see if it improves." If a channel hasn't proven itself in 6 months with focused budget, it's not going to magically work in month 9. Cut it.
First things to kill if you need to preserve cash or CAC isn't working.
| Cut First | Why | Cash Saved |
|---|---|---|
| Brand awareness campaigns | Can't track ROI, doesn't generate pipeline | $2-5K/month |
| Video production | High cost, unclear conversion impact | $3-8K/project |
| Events/conferences (as sponsor) | Expensive, hard to attribute, long sales cycles | $5-15K/event |
| PR/media relations agency | No direct pipeline, expensive retainer | $3-6K/month |
| Marketing automation platforms | Overkill for <100 customers, use simpler tools | $500-2K/month |
| Display/banner ads | Low intent, expensive, hard to convert B2B | $2-4K/month |
Last things to cut: Your proven channel spend, basic CRM/email tools, case study/comparison content. These directly impact your ability to acquire and convert customers.
B2B SaaS company, $1.2M ARR, $15K ACV, 6-month sales cycle. Last 10 customers came from LinkedIn outbound + Google Search.
Total: $7,950/month × 3 = $23,850
Q1 Results: LinkedIn generated 18 customers at $1,850 CAC. Google generated 4 at $2,100 CAC.
Total: $9,850/month × 3 = $29,550
Q2 Results: LinkedIn generated 32 customers at $1,650 CAC. Google generated 9 at $1,900 CAC.
Total: $11,900/month × 6 = $71,400
Q3-Q4 Results: LinkedIn generated 68 customers at $1,550 CAC. Google generated 22 at $1,800 CAC.
The trap: "We need a marketing hire to run all this." Spend $80K on salary + benefits, leaving $20K for actual programs.
The reality: A marketer with no budget can't prove anything. They'll spend 6 months "building strategy" while you burn cash.
What to do instead: Spend $100K on programs, use fractional/advisor support for 5-10 hours/month ($2-3K). Hire full-time only when you have $200K+ budget.
The trap: "Our website looks old. Let's spend $30K on redesign before we start marketing."
The reality: Your website conversion rate doesn't matter if you have no traffic. Spend $2K on basic cleanup, put the rest into channels.
What to do instead: Ship a decent-looking site in 2 weeks. Redesign only after you're driving 1,000+ visitors/month and have conversion data.
The trap: "Let's create 50 blog posts and wait for SEO to kick in." Spend $25K on content with zero short-term pipeline.
The reality: SEO takes 6-12 months. You'll run out of cash before it pays off.
What to do instead: Spend 80% on channels that work this quarter. Invest 20% in content only after you know what problems/keywords actually convert.
The trap: "Let's try everything: LinkedIn, Google, Facebook, Reddit, Twitter ads." Spread $5K across all of them.
The reality: $1K/month isn't enough to learn anything. You'll get 10-20 clicks per channel with no conclusions.
What to do instead: Pick the two most likely channels. Give them real budgets ($4K and $2K). Kill the loser after 60 days.
The trap: Month 4: "LinkedIn isn't working yet but let's give it 2 more months." By month 6, you've spent $30K proving it doesn't work.
The reality: If a channel hasn't shown promise by month 3, it's not suddenly going to work in month 6.
What to do instead: Set kill triggers up front. CAC above $4K after 90 days? Cut immediately. Don't throw good money after bad.
If you're sitting on a limited budget and can't afford to waste it testing the wrong channels, let's talk.
We help capital-constrained companies build focused channel strategies, set proper kill triggers, and make ruthless quarterly decisions based on actual CAC data.
Stop spreading thin. Start concentrating fire on what actually works.
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