A percentage of revenue is a way to check a budget. It isn’t a way to build one.
That’s our answer to how much should a small business spend on marketing. The published benchmarks run from 7.7% to 9.4% of revenue, and we’d use them to see whether your number is in a sensible range. Then we’d set them aside and start from the work you want the business to do next year. A budget built that way can be defended. One copied from a survey can’t.
How much should a small business spend on marketing?
Two annual surveys get quoted most. Neither was built for a shop with six employees.
The Gartner 2025 CMO Spend Survey put marketing budgets at 7.7% of company revenue. It also found that 59% of the marketing chiefs said that wasn’t enough to carry out their strategy. Gartner surveyed North America, the United Kingdom and Europe, and the vast majority of those companies had more than $1 billion in annual revenue. The CMO Survey from Duke University’s Fuqua School of Business landed higher, at 9.4% of revenue among for-profit U.S. companies.
Corporate budgets pay for salaries, software and national advertising. We haven’t found a current survey of comparable quality for a business the size of a chiropractic office in Lansdale. So treat the range as a reference for scale. It doesn’t predict what any amount will return.
Here is the scale. A contractor with $600,000 in revenue, at 7.7%, would spend about $46,000 a year, or roughly $3,850 a month. Whether you should match that is a separate matter. A business that wants to stay the size it is, with a strong referral base, can often spend less. One that is new, adding a location or replacing work it lost usually needs more for a while, because it’s building what an established business already has.
Start from the jobs, not the percentage
The U.S. Small Business Administration’s marketing guide doesn’t name a percentage either. It says to include a complete breakdown of the costs of your marketing plan, be as accurate as possible, and keep tracking those costs once the plan is running. Notice what it asks for. A breakdown, not a rule of thumb.
Here is how that breakdown starts. Picture a deck builder in Skippack. Every number is made up, so swap in yours. The average job is $12,000 and next year’s goal is 25 more jobs, which is $300,000 of new work. The builder wins about one in three estimates, so that takes 75 estimates. About half of the people who call are a fit for an estimate, so the year needs 150 inquiries, or 12 or 13 a month.
Now the budget has a shape. What would it cost, in that trade and those towns, to bring in a dozen suitable inquiries a month? That depends on what advertising costs for the service, how well the website turns a visitor into a call, and how much the Google Business Profile and search visibility bring in without an ad. If the builder doesn’t know the close rate, or how many inquiries arrive in a month, the first money should go toward being able to count.
Three kinds of marketing money
Not every dollar does the same job, and the three kinds behave differently.
The foundation is what has to exist before anything else works: a website that explains what you do and makes contact easy, an accurate Google Business Profile, and a way to track calls and forms. It’s a steady monthly cost. We’d fund it first, and some owners push back because it’s the least exciting line on the page.
The engine is the ongoing work that builds over time. That means local search work, pages for the services and towns you want, reviews and regular content. It’s the slowest to show a result and the first to be cut when cash is tight. Stopping after a few months can mean paying for the early work without staying long enough to see what it would have done.
The fuel is paid advertising. Google Ads can bring inquiries sooner than search work once the campaign and the page behind it are ready, and it’s the part you can turn up or down. Booked out for six weeks? Lower it. Paid clicks sent to a page that doesn’t make the next step clear are an expensive way to learn the page needed work.
A new business with no reviews and a thin website has more foundation to pay for. An established one with a good site might put most of its new money into fuel and adjust by season.
Decide what you’ll count before you spend
Pick the counting rules first, or in six months you’re back to “I think the ads helped.” Where did each inquiry come from? Did it become an estimate, and did the estimate become a job you wanted? Call and form tracking can answer the first question where the tools allow it. Someone in your business has to write down the rest. With those records you can work out what an inquiry costs from each source, and what a job costs. Our article on how to know if your marketing is working goes through it.
Then give each part a fair run. Ads produce information fairly quickly once they’re live, though a campaign needs time and adjustment before you judge it. Search visibility usually takes longer, and how much longer depends on your starting point and your competition.
The same monthly amount can also buy very different things. Some businesses have one person on the website, another on ads, and whoever has time on social media, and nobody checks whether the pieces connect. The owner ends up doing that, and the time is part of the cost. Our marketing packages put one team on the agreed work. Ad spend is separate, and Google Ads management is scoped as its own service, so you can see what the monthly figure covers. If the budget isn’t there yet, our piece on low-cost marketing strategies for a small business covers what you can do with your own time in the meantime.
A budget that grew with the business
Core 3 Physical Therapy came to us with two locations, not enough leads and bookings, and a history of freelancers who kept disappearing. We reworked the website, set up Google Ads, and took on ongoing local SEO for all of their locations. The campaign launched 45 days after we started, which is the time to launch and says nothing about how long results took.
Their case study on our client results page reports that during their time with us they grew from two locations to five, with Google Ads campaigns added for each location and our marketing work supporting the additional ones. The advertising was added clinic by clinic as the practice grew, which is a different thing from picking a percentage. Individual results vary, and this is one client’s.
Work out your own number this week
A bigger budget won’t fix a phone nobody answers or an estimate that goes out four days late. And no one can tell you that a certain monthly amount will produce a certain number of jobs by spring. We can see calls and forms where tracking is in place. We can’t see which caller became a new roof and which one wanted a free gutter cleaning. Your word on which inquiries were worth having is what turns a budget from a guess into something you can check.
This week, take twenty minutes and write down three numbers: what an average job is worth, how many estimates turn into jobs, and how many inquiries came in last month. It costs nothing, and it’s the part of the budget no benchmark can fill in.
Send them to us with what you spend today, and we’ll tell you what we’d recommend, why, and what it would cost before you decide anything. Tell us what you want more of. Your first consultation is free. You can also call us at (215) 368-8900.