How Much Should a Small Business Spend on Marketing?
The Gas Tank Analogy
Think of marketing like fueling your car. Too little gas, and you stall out before reaching your destination. Too much at once, and you waste money. The right budget depends on your journey, your vehicle, and how far you need to go.
How Much Should a Small Business Spend on Marketing?
A common rule of thumb is 5–10% of revenue, but the right spend depends on your industry, goals, and growth stage. Businesses aiming to scale quickly may need to invest more, while those focused on steady local visibility may need less.
Factors That Influence Marketing Spend
Industry Standards
Retail and restaurants often spend more; service providers may spend less.
Business Goals
Are you aiming for steady growth, or an aggressive expansion?
Stage of Growth
Startups often invest more heavily upfront to build awareness.
Competition
In competitive markets like real estate or healthcare, higher spend is often required.
Stretching Your Budget Wisely
Prioritize High-ROI Channels: SEO, email, and targeted ads often outperform broad campaigns.
Track Results: Measure cost per lead and customer acquisition cost.
Start Small, Scale Smart: Begin with manageable spend and increase as results prove themselves.
Local Example: Budget with Backbone
An Anoka home service business set aside 7% of revenue for marketing, focusing on Google Ads and local SEO. Within a year, their lead flow doubled — without overspending. The key was tracking results and reinvesting in what worked.
The Takeaway
There’s no magic number, but there are smart guidelines. Start with 5–10% of revenue, adjust based on your goals, and focus on strategies that bring measurable results.
At Moon & Marrow, we help small businesses design marketing plans with backbone — intentional, efficient, and tailored to your growth stage.
Ready to set a budget that fuels real growth? Let’s build your plan.
