How Much Should a Small Business Actually Spend on Marketing?
- 4 hours ago
- 3 min read
It's one of the first questions we hear in almost every initial consultation.
"How much should we be spending on marketing?"
If you've searched for the answer, you've probably found the same recycled advice everywhere: spend a fixed percentage of your revenue and call it a day. That advice isn't wrong, exactly. It's just incomplete, and for a lot of small businesses, it leads to budgets that are disconnected from what the business actually needs.
So let's answer the question the way we'd answer it if you were sitting across the table from us.
Why the Percentage Rule Falls Short
A percentage of revenue is a starting point, not a strategy. Here's the problem with stopping there:
A percentage tells you how much to spend. It tells you nothing about what to spend it on, whether that spending is connected to a goal, or whether your business is at a stage where the money will compound or evaporate.
We've seen businesses spend generously and get nothing, because the budget went into disconnected tactics. We've seen businesses spend modestly and grow steadily, because every dollar had a job. The size of the budget matters less than the structure behind it.
Start With the Question Behind the Question
When an owner asks "how much should I spend," what they're usually asking is: "How do I spend money on marketing without wasting it?"
That question has a real answer, and it starts with three things:
1. What is the goal? Not "more visibility." A real goal: a number of qualified inquiries per month, a booking rate, a revenue target for a specific offering. Your budget should be sized to a goal, because a goal is the only way to know whether the spending worked.
2. What already exists? A business with a converting website, an email list, and a claimed Google Business Profile can put new dollars into visibility and watch them compound. A business without that foundation will pour money into ads that drive traffic to a site that can't convert it. Before you increase spend, make sure the infrastructure can catch what the spending attracts.
3. What can you sustain? Marketing rewards consistency more than intensity. A budget you can hold steady for twelve months will outperform a big number you can only fund for eight weeks. Set the number you can commit to even in a slow quarter.
Where the First Dollars Should Go
If you're building a budget from scratch, this is the order of operations we recommend for most small businesses, and it's the same sequence we use inside The Bowerbird Method:
First: your owned foundation. Your website, your email capture, your Google Business Profile. These are the assets you control, they don't disappear when an algorithm changes, and every other marketing dollar performs better once they're solid.
Second: discoverability. Search visibility, local listings, and content that answers the questions your customers are already asking. This is slower to build and hardest to lose.
Third: amplification. Social media, advertising, and campaigns. These work beautifully as the top of a connected system. They underperform badly as the whole plan.
Notice that this is the reverse of how most businesses spend. Most start with amplification, because it's the most visible, and wonder why the money isn't coming back.
The Honest Answer About Numbers
We're not going to hand you a magic percentage, because we'd be making it up, and we don't do that. What we will tell you is how to find your number:
Take your goal. Work backward through your funnel: how many inquiries produce a customer, how many visitors produce an inquiry, and what it realistically costs to produce that visibility in your market. Add what it costs to keep your foundation maintained. That total is your budget. It's specific to your business, which is exactly why the generic percentages never quite fit.
If that math feels out of reach right now, that's normal, and it's fixable. Most owners have never been shown their own numbers. Finding them is usually the single most clarifying exercise a small business can do.
When You're Not Sure Where to Start
This is precisely the kind of question we work through with owners in The Bowerbird Collective, our monthly strategic advisory for businesses that want expert direction without a full agency retainer. And if you'd rather just talk it through, our consultations are complimentary and built around your business, not a pitch.
Marketing budgets don't need to be a guess. They need a goal, a foundation, and a number you can sustain. Get those three right and the percentage takes care of itself.
Comments