If you’ve searched for a straight answer, a fixed percentage, a magic number, you’ll have noticed nobody quite agrees. That’s not because nobody knows, it’s because there genuinely isn’t one correct answer. The right marketing budget depends on your goals, your margins, what stage your business is at, and which channels actually make sense for what you sell.
That’s not a way of avoiding the question. It’s the honest starting point.
Why There Isn’t One Correct Percentage
You’ll see figures like “spend 5-10% of revenue on marketing” repeated across a lot of generic advice. As a very rough starting point for an established business with healthy margins, that’s not unreasonable, but it falls apart quickly once you look at real, individual businesses.
A business with high margins and a high customer lifetime value, a bespoke garden room manufacturer, say, where a single order runs into thousands of pounds, can justify a considerably higher marketing spend per customer than a business with thin margins and low order values. A brand new business trying to build initial visibility often needs to spend more relative to current revenue than an established one with years of word-of-mouth and repeat custom behind it. And a business in a genuinely competitive local market often needs a bigger budget just to be seen at all, regardless of what a generic percentage rule would suggest.
What Determines a Marketing Budget for Small Business?
What a new customer is worth to you. This is the single most useful number most businesses have never properly calculated. If a new customer is worth £50 to you once, your marketing budget needs to reflect that. If a new customer is worth £2,000 over the life of the relationship, the maths changes completely. It’s worth genuinely understanding this figure before deciding on a budget, not after.
What stage your business is at. A business trying to build visibility from a standing start needs a different budget shape than one protecting and growing an established position. Early-stage spend is often about testing and learning what works, later-stage spend is more about consistent, predictable investment in what’s already proven.
How competitive your market actually is. Some sectors and locations are genuinely harder to be found in than others. A budget that would comfortably dominate a quiet niche might barely register in a crowded one.
Which channels actually make sense for what you sell. Different channels do different jobs. SEO and content can build visibility and trust over time, while Google Ads can put you in front of people already searching for what you offer. The right balance depends on how your customers buy, how quickly you need results, and what the search opportunity actually looks like.
What Should You Include in a Marketing Budget?
Your marketing budget isn’t necessarily just what you spend on advertising.
Depending on your business, it might include Google Ads or other paid media, SEO, content creation, email marketing, software, design, photography and external marketing support.
That’s another reason percentage-based advice can be misleading. Two businesses might both say they’re spending £2,000 a month on marketing, while one is putting almost all of it into advertising and the other is spreading it across several different activities.
Know what’s included in the number before you compare your budget with somebody else’s.
What This Might Actually Look Like
Rather than fixed figures, it’s more useful to think in terms of scale of investment.
At a smaller scale, the sensible approach is usually to be selective. You might invest in a focused piece of ongoing SEO or content work, for example, rather than trying to stretch a limited budget across SEO, paid advertising, social media and everything else at once.
If you’re considering Google Ads specifically, remember that your advertising spend and the cost of managing the campaigns are two separate things. The amount needed for the ads themselves will depend heavily on what you’re selling, where you’re targeting and how competitive those searches are.
At a mid-range scale, there’s usually more room to combine activity, running Google Ads while investing in SEO, for example, or concentrating more heavily on one channel where there’s a particularly strong opportunity. The important thing isn’t having a presence everywhere, it’s putting enough resource behind the things most likely to produce a return.
At a larger scale, a broader marketing programme becomes possible, but it doesn’t necessarily need to happen. For some businesses, the best use of a bigger budget could still be concentrating heavily on one or two channels. For others, it might fund a genuine combination of SEO, Google Ads, content and strategic marketing support.
None of this is about hitting a particular number. It’s about matching the scale of investment to what your business can genuinely support and what you’re trying to achieve.
Don’t Spread a Small Budget Too Thinly
One of the most common problems I see isn’t necessarily that a business is spending too little on marketing. It’s that the money is being divided between too many things.
A modest budget invested properly in the right activity can be considerably more useful than the same amount split between Google Ads, SEO, social media, email marketing and content simply because somebody feels the business ought to be doing all of them.
You don’t need to be everywhere. You need to understand where your customers are, what influences their decision, and which activity gives you the best chance of reaching them.
The Question Worth Asking Instead
Rather than asking:
“What percentage of my revenue should I spend on marketing?”
I’d start with:
“What is a new customer worth to my business, and what can I reasonably afford to spend to acquire one?”
Imagine a new customer generates significant revenue for your business. That doesn’t mean you can afford to spend the same amount acquiring them. You still have your cost of delivering the work, overheads and the profit you need to make.
But once you understand what remains, you can start working backwards. How many additional customers do you want? What could you afford to spend to acquire each one? Which marketing channels are most likely to reach those customers?
That’s a much more useful basis for setting a budget than taking an arbitrary percentage of last year’s turnover.
Not Sure What Your Marketing Budget Should Be?
If you’re trying to work out where your marketing budget would be best spent, that’s something we can look at in a free 30-minute Seed Session.
I’ll take a look at where you are now, what you’re trying to achieve and which areas of marketing are genuinely worth considering. If I don’t think you need to spend more, I’ll tell you that too.
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