How much should a small business spend on marketing?

Recent surveys put marketing at roughly 6% to 10% of revenue, and in one of them the smallest companies spent even more. That range is a starting point, not a rule. For a local business the better question is what the number buys: the basics that keep you findable, and a smaller amount you can test and turn up or down. Here is what the surveys say, what the percentages mean in dollars, and how to adjust them to where your business is right now.

What the surveys say

Read these with care. The CMO Survey answers come mostly from larger companies, and only 20 of them were under $10 million. Intuit's sample included businesses with 50 to 100 or more employees, so its average is far above what a cafe or a two-chair salon spends. The LocalImpact survey is the closest to a neighborhood business, and it points to the same 6% to 10% band.

The percentages in dollars

Here is plain arithmetic for three sizes of business. The 3% column is our example of a lean budget, not a survey figure.

Use revenue, not profit, because that is how both percentage surveys asked. If your margins are thin, stay toward the lower end and spend more only where you can see it working.

Where you are changes the number

You opened this year. Nobody knows you yet, so budget toward the top of the range for the first months. The Small Business Administration's blog gives the same advice: spend more at the start to build awareness, then bring it down once you are established.

You are established and mostly busy. Referrals and repeat customers carry you. Spend toward the lower end to stay visible, and keep the rest for slow months.

You are growing on purpose. A second location, a new service, a bigger team to keep busy. Raise the budget for a set period, three to six months, tied to that one goal, then look at what it brought in.

You have a waiting list. Do not buy ads you cannot serve. Keep the basics running and save the money for the season when the calendar thins out.

Pay for the basics first

Before any ads, a few things should simply work. Most of them cost more time than money.

• Your Google Business Profile. Google lets you manage how your business shows up on Maps and Search at no charge. We cover what it includes in What is a Google Business Profile, and is it free?
• A website or at least one page with your services, area, hours and a way to book or call.
• Regular posts on one or two networks. When someone looks you up before calling, a feed that stopped in spring makes them wonder whether you are still open.
• Reviews. Ask every happy customer, every time.

Think of these as the fixed part of the budget. They should run every month, quiet or busy.

Then add a budget you can test

Paid ads are the part you turn up and down. In LocalImpact's survey, 44% of local businesses named social media advertising as the channel they spend the most on. Google Ads came next at 17%. That is no reason to copy them, but it is a sign of where most owners start.

Pick one platform, one offer and a fixed amount for a month. Our guide to Facebook ad budgets shows how to work out a first number from what a customer is worth, and Google Ads or Facebook ads helps you choose between the two.

One number to track

At the end of each month, divide what you spent on marketing by the number of new customers. That is what a new customer cost you. To know where they came from, ask every new customer one question: how did you hear about us? Write the answer down.

If a new customer costs less than they are worth to you over their first year, the budget is doing its job and you can raise it slowly. If it costs more, change the offer or the channel before you change the amount.

Where we fit, and where we do not

Done-for-you posting belongs in the fixed part of the budget. Our plans run from $49 to $299 a month: you send photos and short clips from your phone, and we turn them into posts and publish them. For the part you test, our Facebook & Instagram Ads service starts at $99 a month, with the ad budget paid by you straight to Meta.

We are not the right fit if your whole budget is under a hundred dollars a month. Put that into your own time on the basics above first. We also do not do print, radio, events or sponsorships. If those bring your customers in, keep the money there. See the plans and services.