How much should a small business spend on marketing?
There is no correct percentage. The figures quoted most often are averages taken across businesses that have almost nothing in common with yours, and an average is a poor instruction. A more useful starting point is what you need the spend to buy.
Why the percentage rules mislead
A share-of-revenue rule treats a business with a full order book and a business with no enquiries as the same problem. It also ignores margin: the same percentage means something very different to a trade with high labour costs than to a service business with almost none. And it is circular — if revenue is low because nobody knows you exist, a percentage of that revenue is precisely the wrong number.
Start from the job, not the budget
Ask what the money is supposed to achieve. Getting found at all is a different job from converting people who already found you, which is different again from bringing back customers you have served before. Each has a different cost and a different speed. A business that needs its first hundred customers is buying reach. A business losing enquiries at the last step is buying a better website, not more traffic.
The two costs people forget
The first is your time. An owner spending six hours a week on marketing is spending real money, and pretending otherwise makes cheap options look cheaper than they are. If buying something back gives you those hours for less than they are worth to the business, that is a saving rather than a cost.
The second is the cost of stopping. Advertising generally stops working the day you switch it off. A website, a body of content and an owned customer list keep working. Neither is better in the abstract, but they behave completely differently when money is tight, and a budget made entirely of the first kind is fragile.
Setting a number you can defend
- Work out what a customer is worth. Not one transaction — what they typically spend over the time they stay with you.
- Decide what you could afford to pay for one. Some sensible fraction of that value, leaving margin.
- Set the budget from the customers you need. Target customers multiplied by what you can pay for each gives a figure grounded in your business rather than someone else's average.
- Split it deliberately. Decide in advance what goes to things that stop when you stop paying, and what goes to things you keep.
- Hold a floor through the quiet months. The instinct to cut marketing first is understandable and usually expensive, because the gap shows up later when you can least afford it.
When to spend more, and when to stop
Spend more when something is repeatably producing customers at a cost you are happy with and the only limit is budget. Stop, or change, when you cannot say what a line of spending has produced. That is not the same as demanding proof of causation for everything — some work genuinely cannot be traced cleanly — but you should at least be able to say what you expected it to do and whether anything moved.
How Soclo approaches it
Soclo keeps campaign work, website activity, bookings and payment records in one place when the relevant sources are connected, so a budget conversation can start from what actually happened rather than from memory. Campaign budgets, prices and payment settings always require your confirmation.
See marketing strategy →The bottom line
Do not ask what percentage other businesses spend. Work out what a customer is worth to you, decide what you can afford to pay to win one, and buy that. Then protect a floor you can hold through a bad quarter — for the same reason a posting cadence should be set from your worst week rather than your best.