How much should a small business spend on marketing?
The honest starting point is a percentage of revenue: benchmarks from BDC put the average B2B company at roughly 2-5% of revenue and the average B2C company at 5-10%, and The CMO Survey reports the average company spends about 11.4% of its overall budget on marketing. For most small businesses, the better method is to work backwards from what a new customer is worth to you.
Ask ten people what you should spend on marketing and you will get ten answers, most of them trying to sell you the thing they do. Every business owner has had that conversation, and it is why a marketing budget built on someone else’s pitch rarely survives contact with a real marketing strategy. So let us do this properly: the published benchmarks, then the way to work out the right number for your business rather than anyone else’s.
What the benchmarks say
There is no official figure, but a few credible, dated ones are worth knowing:
| Source | Benchmark | Notes |
|---|---|---|
| BDC (Business Development Bank of Canada) | B2B: 2-5% of revenue. B2C: 5-10% of revenue | Rules of thumb; B2C is higher because you are reaching more people, more often |
| The CMO Survey (reported by HubSpot, January 2026) | Average company spends 11.4% of its overall budget on marketing | Survey skews to larger companies with finance departments, so treat as an upper reference point |
Notice how wide those ranges are. A percentage of revenue gets you into the right postcode; it cannot pick the house. Two businesses turning over the same amount can sensibly spend very differently depending on their margins, their competition and how much of their work already comes from referrals.
The better method: work backwards from a customer
Here is the approach we use with our own clients, and it only needs three numbers you already know:
- What is a new customer worth? Not the first job – the realistic total over the relationship. A plumber doing one-off repairs might put it at a few hundred pounds; an accountant keeps a client for years.
- How many enquiries become customers? If you convert one in three enquiries, and a customer is worth £900, then an enquiry is worth roughly £300 to you.
- What can you afford to pay for that enquiry? Enough to leave healthy profit after delivery costs. If £300 of value costs you £150 to buy, you will grow broke.
Now the budget writes itself. Want ten new customers a month and each enquiry is worth £300? You need thirty enquiries. If your digital marketing produces enquiries at a £50 cost per acquisition, that is £1,500 a month. If that number makes you wince, the problem is not the marketing budget – it is that the maths of the business needs work first. This is also why knowing whether your marketing is actually working matters more than the size of the spend: a cost per enquiry you cannot measure is a budget you cannot justify.
Where the money typically goes
For most small businesses the budget splits across four buckets:
- Being found when people search – SEO and your Google Business Profile. Slower, but it compounds, and the traffic keeps coming when you stop paying for ads.
- Buying visibility now – Google Ads and social ads. Fast and measurable, but it stops the day you stop paying. We have a separate guide on how much to spend on Google Ads.
- Staying in front of people – email and social content. Often the cheapest bucket and the first one cut, which is backwards; email in particular works hard for very little money.
- The website itself – hosting, maintenance, improvements. It is the shop window every other bucket points at.
A common mistake is spending the whole marketing budget behind a single campaign or channel. All ads means you rent visibility forever. All SEO means nothing new to show for months. A sensible small-business mix usually buys some immediate visibility while building the search presence that lowers your cost per enquiry over time.
What a realistic small business budget looks like
Percentages are abstract, so let us make it concrete. A UK business turning over £250,000 at the BDC’s B2C rule of thumb is looking at £12,500 to £25,000 a year – call it £1,000 to £2,000 a month. Below roughly £500 a month you are largely limited to doing things yourself well: your Google Business Profile, reviews, email to past customers and steady content, which is genuinely where every small business should start because most of it costs time, not money.
To anchor the agency end: our own marketing management at Bamsh starts at £345 a month plus VAT, and what that covers is on our pricing page. Anyone else’s number should come with the same clarity – what is included, what it is expected to produce, and how you will both know whether it is working.
When to spend more, and when to spend less
Spend more when the maths says a bought enquiry is comfortably profitable and you can handle the work. That is the only “scale” button that matters. Spend less – or stop – when you cannot trace enquiries back to the spend, when the work you win from it is your worst work, or when you are funding it by starving the things that already bring you customers for free, like reviews and referrals.
One last test before any spend: if you cannot say what you want the money to produce, in enquiries, by when, do not spend it yet. “More awareness” is how budgets disappear.
Frequently asked questions
Is 10% of revenue on marketing too much for a small business?
Not automatically. A newer business buying its way into a market, or a B2C business with good margins, can justify it. An established business with a full diary from referrals may need far less. Judge the return, not the ratio.
Should I stop all marketing when work is busy?
Tempting, and usually regretted about three months later when the diary thins out. Dial back paid spend if you must, but keep the compounding things – reviews, your Google profile, email – ticking over. They are cheap and they are your next busy period.
What is the cheapest marketing that actually works?
Asking happy customers for Google reviews, keeping your Business Profile accurate, and emailing past customers occasionally. None of it costs more than an hour a week, and for many local businesses it outperforms everything they pay for.
How do I know if my agency is worth the fee?
Same maths: enquiries produced, cost per enquiry, value per customer. If they cannot show you that chain, you cannot judge them – and they probably cannot judge themselves either.
Sources and checks
- BDC: What is an average marketing budget for a small business? (B2B 2-5%, B2C 5-10% of revenue): https://www.bdc.ca/en/articles-tools/marketing-sales-export/marketing/what-average-marketing-budget-for-small-business
- HubSpot, January 2026: Marketing budget – how much should your team spend in 2026? (The CMO Survey: average 11.4% of overall budget): https://blog.hubspot.com/marketing/marketing-budget-percentage
- Bamsh Knowledge Centre: How much should a small business spend on Google Ads? https://bamsh.co.uk/how-much-should-a-small-business-spend-on-google-ads/
- Bamsh Knowledge Centre: How do I know if my marketing is actually working? https://bamsh.co.uk/how-do-i-know-if-my-marketing-is-actually-working/
Sources checked 29 October 2026.
