The short answer: most businesses spend between 5 and 10% of gross revenue on marketing. Established companies protecting their position sit near the bottom of that range. Businesses in growth mode, or in crowded markets, often push to 12% or more.
That benchmark is a starting point, not a rule. Here is how to turn it into a number that actually fits your business.
Start with revenue, then adjust for your stage
Take last year’s gross revenue and calculate 5 to 10% of it. A business doing $300,000 a year lands somewhere between $15,000 and $30,000 annually, or roughly $1,250 to $2,500 a month.
Then adjust:
- Just starting out? Lean higher. You have no existing customer base doing your marketing for you through referrals, so visibility is worth paying for.
- Established with steady referrals? You can lean lower, but do not go to zero. Referral pipelines dry up quietly, and rebuilding visibility costs more than maintaining it.
- Entering a competitive market? Expect to spend more than the incumbents to get noticed. They already rank, already have reviews, and already show up first.
Where the first dollars should go
Order matters more than amount. A common mistake is buying ads that send clicks to a website that cannot convert them.
- A website that converts. Fast, mobile-first, with a clear next step on every page. Every other marketing dollar flows through this asset.
- Local visibility. A complete Google Business Profile and consistent business listings. This is the cheapest visibility you will ever buy, and often free.
- SEO. Compounds over time. The work you pay for this year keeps producing traffic next year.
- Paid ads. Fast and measurable, but only once the first two exist. Ads amplify whatever they point at, including a bad website.
How to tell if you are underspending or overspending
You are probably underspending if new customers only come from referrals, your competitors outrank you for your own service in your own city, or revenue has been flat while the market around you grows.
You are probably overspending if you cannot name what any given channel returned last quarter. The problem there is usually not the budget. It is the absence of measurement, and it is fixable without spending more.
The one non-negotiable
Whatever number you choose, measure against it. Cost per lead, cost per customer, and revenue per channel. A $1,000 monthly budget that you measure will outperform a $3,000 budget that you do not, because you can move the measured budget toward what works.
Not sure where your number should be? Our free audit looks at your current presence and tells you where the first dollar would do the most work. No obligation, and we will tell you honestly if you do not need us yet.