For many small business owners, deciding how much to spend on marketing can feel like guesswork. Spend too little and you risk staying invisible. Spend too much in the wrong places and you can burn through money without seeing much return.
You may have heard rules suggesting that businesses should spend a certain percentage of turnover on marketing. These figures can be useful as a starting point, but they are rarely the full answer. The right marketing budget depends on your goals, your market, your customers and how quickly you want the business to grow.
Rather than asking, “What percentage should I spend?”, it is often more useful to ask what you are trying to achieve and what it will realistically cost to get there.
There is no perfect percentage
Marketing budgets are often discussed as a percentage of revenue. That can be helpful because it creates some discipline around spending, but there is no universal figure that works for every business.
A well-established company with a loyal customer base may only need to maintain visibility and generate a steady flow of enquiries. A newer business may need to spend considerably more to build awareness, attract its first customers and establish credibility. A business trying to grow quickly will usually need to invest more than one that is comfortable maintaining its current position.
This is why percentages should be treated as a guide rather than a rule.
Start with what you want marketing to achieve
Before setting a budget, decide what you actually want marketing to do. You may want to generate more enquiries, increase sales, launch a new service, enter a new market, build awareness locally, improve customer retention, encourage repeat business or strengthen your brand.
Those objectives require different approaches and different levels of investment. If your goal is simply to keep an established business visible, your budget may be relatively modest. If you want to double sales, enter a competitive market or build a new brand from scratch, the budget will need to reflect that ambition.
What actually counts as marketing spend?
One of the biggest mistakes businesses make is assuming that their marketing budget means advertising spend. Advertising is only one part of it.
Your marketing budget may include Google Ads, social media advertising, website development and maintenance, search engine optimisation, branding, graphic design, photography, video, email marketing, content creation, printed material, marketing software and external support.
For sole traders and partnerships, some marketing costs can also be treated as allowable business expenses. HMRC includes costs such as advertising and website expenses among the types of marketing expenditure that may qualify. You can read the full guidance on allowable marketing expenses for self-employed businesses
The important thing is to look at the whole picture. If you spend £500 on advertising but your website is confusing, slow or poorly written, part of that advertising budget may simply be sending more people towards something that does not convert.
Do not spread a small budget too thinly
This is where many small businesses come unstuck. They feel they need to be doing everything at once: Google Ads, Facebook, Instagram, LinkedIn, SEO, email marketing, video, blogging and perhaps some print as well.
The result is often a small amount of money and effort spread across too many channels. £500 spent properly in one or two places can often be more effective than £100 spread across five.
The aim is not to be everywhere. It is to be visible in the places that matter to your customers. That is why a clear marketing strategy matters. It helps you decide what deserves your attention and, just as importantly, what does not.
The £500 question
Imagine you had £500 a month to market your business. Where would you put it?
There is no single correct answer. A local service business might benefit from Google Ads because potential customers are actively searching for help. A visually led business may get more value from strong photography, social content and targeted advertising. A B2B company could benefit more from LinkedIn, email marketing and useful content.
A business with poor website conversion might be better spending the first £500 improving its website before spending anything on advertising at all.
This is why marketing budgets should follow strategy, not the other way round. Do not start with the money and ask where you can spend it. Start with the customer journey and decide where investment is most likely to make a difference.
Know the difference between marketing activity and marketing results
It is easy to feel productive because you are posting regularly, running an advert or sending emails. Activity, however, is not the same as effectiveness.
Likes, views and impressions can be useful indicators, but they should not be the final measure of success. What matters more is whether you are getting more enquiries, whether those enquiries are turning into customers, whether customers are spending more, whether they are coming back and whether revenue is growing.
That does not mean every piece of marketing needs to generate an immediate sale. Branding, awareness and trust all matter. Over time, though, marketing should create measurable commercial value.
When should you increase your marketing budget?
A good time to spend more is when you know something is working.
If a campaign consistently generates profitable enquiries, increasing the budget may help you generate more of them. If your email marketing produces repeat sales, investing more time in building your list may make sense. If certain content consistently brings qualified visitors to your website, producing more of that type of content could be worthwhile.
The important point is that increased spend should follow evidence. Do not increase a marketing budget simply because somebody tells you that businesses “should” spend a particular percentage of turnover.
Spend more when you understand what is working and why.
What if your budget is very small?
A small budget does not mean marketing is pointless. It simply means you need to be more selective.
Focus on the things closest to generating a return. That might mean improving your Google Business Profile, asking existing customers for reviews, building an email list, creating useful website content or concentrating on one social platform rather than five.
Consistency matters too. A modest amount invested every month can often achieve more than occasional bursts of spending followed by months of silence.
Do not forget the cost of doing nothing
Marketing is often treated as an optional expense, but that can be dangerous. If your competitors continue investing in their websites, advertising, content and brand while you stop, the difference may not be obvious immediately.
Over time, however, they become easier to find, easier to remember and easier to choose.
The question is not simply how much marketing costs. It is also what it could cost the business if too few people know you exist, understand what you offer or remember you when they are ready to buy.
Finally
There is no perfect marketing budget. A useful budget is one that reflects your goals, your customers, your available resources and the opportunities in front of you.
Start by deciding what you want marketing to achieve, choose the channels most likely to help you achieve it, measure what happens and then invest more in what works.
At Eunoa, we help small businesses create practical marketing strategies that focus time and budget on the areas most likely to make a difference. If you are unsure where your marketing budget should go, the first step is not necessarily spending more. It is having a clearer plan.