How Much Should a Small Business Spend on Marketing?

In two sentences

The generic “spend 5-10% of revenue” advice is too broad to be useful. What matters more is making sure your marketing bucket is not leaking before you pour more money into it.

Deep dive

Most articles give a percentage and move on. In practice, every business is different, and the right marketing budget depends entirely on what is already working and what is not.

Before spending anything, business owners should check how quickly missed calls are returned, what happens to weekend enquiries, whether quotes are followed up, and whether existing customers are being asked for referrals. The focus should be on improving something that already works before funding something new.

One common mistake is running paid ads (Facebook, Google, or otherwise) without having systems in place to handle the leads that come in. If a lead enquires and waits two days for a reply, the ad worked but the money was wasted.

Another is chasing cold leads before making the most of warm ones. Existing customers, past enquiries, and referrals all convert faster and cheaper than strangers seeing an ad for the first time.

A practical approach: fix the leaks in your lead handling first, then generate leads at no cost through referrals and reviews, then reactivate past customers, and only then consider paid channels. Cold outreach should be the last port of call, not the first.

Most importantly, everything should be measured. If a hundred pounds is spent, what did it produce in leads, customers, and revenue?

For the full breakdown with a real example of a business that cut spend by 20% while improving results, read the full blog post.

If response speed is one of your leaks, this article explains how quickly you should respond to leads.

If past enquiries are sitting untouched, database reactivation can often uncover quick wins without spending more on ads.