Which method is best for a new venture with no historical sales data?

The arbitrary allocation method is particularly suitable for a new venture with no historical sales data because it allows for the flexibility to allocate resources based on subjective judgment and intuition rather than relying on hard metrics that simply do not exist in this scenario. This method gives entrepreneurs the freedom to consider various factors such as market conditions, potential opportunities, and their own experience or expectations about the business's performance.

When historical sales data is lacking, methods like the percentage of sales method or return on investment method become impractical, as they rely on data that the venture has not yet established. The competitive parity method also assumes that the new venture can compare itself to competitors, which may not be feasible if there are no analogous benchmarks or if the competition is not well understood.

Using the arbitrary allocation method allows for creativity and adaptability in how budgetary funds are distributed, which can be essential in the early stages of business development. It enables entrepreneurs to start their marketing initiatives even in the absence of concrete data, facilitating experimentation and learning as the business grows.