Ask ten business owners how much they spend on marketing each month and you'll get ten different answers, and a fair few will admit the number was picked more or less at random, or worse, it's simply whatever was left once rent, wages and stock were paid. That's back to front. Marketing is one of the few costs in a business directly connected to future revenue, so it deserves proper planning, not a leftover figure at the bottom of the page.
Start with a percentage of revenue, then adjust it
The most workable starting point for a small business marketing budget is a percentage of revenue. For an established business mainly looking to maintain its position, that typically sits between 5% and 12%. The range comes from broad industry benchmarking rather than one agency's opinion, and it holds up reasonably well across sectors, though a business selling high-value B2B services will look different to a local shop or trades business.
Where that percentage moves is growth ambition. A business trying to expand quickly, open a second site, or push into a new customer segment often needs to sit higher, somewhere in the 12% to 20% range, sometimes more during a big first push. A business happy with steady, predictable turnover, mainly keeping the phone ringing, can usually sit lower, closer to 3% to 7%, because it's defending ground it already holds rather than taking new ground.
New and growing businesses carry a heavier load
New businesses tend to spend proportionally more than established ones, and it isn't recklessness. A business with several years of reviews, referrals and repeat custom already has a base of demand it didn't have to pay for this month. A business in its first year or two has none of that yet, so every enquiry has to be earned from scratch. That often means putting 15% to 25% of revenue, or of realistic projected revenue if trading history is thin, into marketing simply to reach the point where referrals start doing some of the work unaided.
That can feel uncomfortable for an owner used to treating marketing as an occasional expense rather than a core part of getting a business off the ground, but the logic is no different to spending on stock, premises or staff. You spend ahead of the revenue you're trying to create, not after it arrives.
Splitting the budget across a website, SEO, ads and content
Once there's a rough figure in mind, the next question is where it should go, and the answer shifts with the stage the business is at.
A business working from an outdated or non-existent website should expect a meaningful share of the first year's budget, sometimes a third or more, to go into getting the site right before anything else. There's little value running paid ads or building organic rankings that send visitors to a site that doesn't convert them once they land, and our piece on what makes a website convert covers that in more detail. Once the site is doing its job, ongoing web spend usually settles into maintenance and gradual improvement rather than a big upfront cost.
For most small businesses running month to month, a workable split covers SEO and content for the medium and long term, paid ads for the short term while organic traffic builds underneath, and a smaller ongoing slice for content and social media supporting both. A business needing enquiries this quarter naturally leans harder on paid ads. A business playing a longer game, or working in a sector where trust matters more than speed, leans harder on SEO and content, accepting slower results that tend to cost less per enquiry once they land. Very few small businesses can properly fund every channel at once, so the honest approach is to sequence spend rather than spread a small budget thinly across everything at once.
Marketing isn't the first thing that should get cut
When cashflow tightens, marketing is usually the first line item to face the axe, on the logic that it's discretionary in a way rent or wages aren't. That's a costly habit, because marketing is one of the few levers with a direct line to future revenue. Cutting it doesn't reduce risk, it just delays the drop in enquiries by a month or two while whatever's already in the pipeline runs dry, and then the business is left wondering why things went quiet just as the wider slowdown started to bite.
None of that means spend should never flex. It means treating the decision as a strategic one, weighed against what it actually protects, rather than an automatic reflex whenever the numbers look tight. A business reviewing its budget is usually better served by adjusting which channels get the money, dialling back a weaker campaign in favour of a cheaper one, than by cutting marketing altogether and hoping existing momentum carries it through.
There's no single figure that fits every business, and anyone offering one without asking about your revenue, goals and market isn't giving you a considered answer. Our services are built around that kind of scoped approach rather than one-size-fits-all packages. If you'd like to work out a realistic marketing budget for your own business, get in touch and we'll talk it through properly.