Straight answers
How much should a small business spend on marketing?
The common benchmark is 5 to 10% of revenue for a business holding steady, and 10 to 20% for one actively trying to grow. Percentages are a sanity check rather than a plan, though — the more useful method is to work out what a booked job is worth to you and spend up to a fixed fraction of that to win one, then scale while the math holds.
The percentage method
If you turn over $500,000 and want growth, 10% puts marketing at $50,000 a year, or roughly $4,000 a month across everything: ad spend, management, tools, and build work. It is a reasonable ceiling to sanity-check against, and it stops both under-investing and panic spending.
The better method: work back from a job
Average job value $2,000, and you close one in four leads you speak to. You are willing to spend 15% of revenue to acquire, so $300 per booked job, which is $75 per lead. Now you have a number that tells you whether a channel is working, and permission to spend aggressively while it does.
This also reveals something percentages hide: improving your close rate or your average job value raises what you can afford to spend, which lets you outbid competitors for the same leads. Efficiency downstream buys you room upstream.
Where the money should go first
- Plug the leaksFixing response time and follow-up costs less than buying replacement leads and makes every future dollar work harder.
- Claim the free channelsGoogle Business Profile and reviews cost time rather than money and produce the highest-intent enquiries you will get.
- Then buy demandPaid social once the first two are in place, so the leads you buy actually convert.
The most common expensive mistake: spending the entire budget on ads while the follow-up is broken. That is not a marketing budget, it is a subscription to disappointment.
Related reading
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