How much should a small business spend on marketing each month?

Most small businesses should spend between 5% and 10% of revenue on marketing each month. If you are established and want to hold your position, 5% is usually enough. If you are growing, launching something new, or fighting for share in a crowded market, 7% to 10% is closer to the mark. In dollar terms, a business turning over $50k a month is looking at a small business marketing budget per month of roughly $2,500 to $5,000 all-in, including ads, content, tools, and whoever does the work.

That is the headline. The honest version is more interesting.

Why the percentage rule is only a starting point

The percentage-of-revenue model is useful because it scales with the business. It stops you from overcommitting in a quiet quarter and keeps you investing when things are good. But it is a blunt tool. A new cafe in a busy strip needs almost nothing beyond a sharp shopfront and a working Google profile. A new physiotherapist opening across town from three established clinics needs to spend aggressively for the first six months or nobody will know they exist.

So before you settle on a number, answer three questions honestly:

• Am I trying to defend what I have, or grow into something new?
• How long is my sales cycle? A plumber gets paid this week. A B2B software seller might wait six months.
• What is a customer worth to me over their lifetime, not just on the first job?

A roofer who averages $12,000 a job can spend $400 to win one and still be very happy. A barber charging $35 cannot. The right small business marketing budget per month falls out of that maths, not out of a rule of thumb.

What the money actually buys

When I look at where small business owners are spending, the budget usually splits across four buckets:

1. Paid ads (Google, Meta, sometimes local print or radio). Direct, measurable, hungry.
2. Content and SEO. Slow, compounding, the thing that makes ads cheaper later.
3. Tools and platforms. Email, booking, CRM, hosting. Smaller than people think.
4. The labour to do the work. This is the line most owners underestimate.

That last one is where budgets quietly disappear. An agency on retainer will eat $2,000 to $5,000 a month before a single ad runs. A freelancer is cheaper but slower and harder to keep accountable. A staff hire is the most expensive option of all once you add super and the time it takes to manage them.

If you are spending $3,000 a month and $2,400 of it is going to the person doing the work, you do not have a marketing budget. You have a salary with a bit of ad spend bolted on.

Where this advice does not work

A few situations break the percentage rule.

Pre-revenue businesses cannot use it at all. If you are launching, you need a fixed launch budget based on what you can afford to lose, not a percentage of revenue you do not yet have.

Highly seasonal businesses (tourism, weddings, tax accountants) should spend ahead of the season, not during it. The percentage smooths out over the year but the monthly spend should not.

And if you sell something with a very long sales cycle, you may need to spend more for longer before anything shows up in revenue. That is uncomfortable but it is the job.

A simpler way to think about it

Forget the percentage for a second. Ask: what is one new customer worth to me, and how many do I need this month? Multiply the two, work backwards, and you have a target. Then check whether that target is between 5% and 10% of revenue. If it is, you are sane. If it is wildly higher, something in the model needs to change before you spend the money.

I have run marketing for everything from corner shops to listed companies, and the pattern holds at every size. The businesses that win are not the ones with the biggest budget. They are the ones spending consistently, on the right things, and not losing half of it to the cost of getting the work done. That last problem is the one I built In-House to solve, so a small business owner can put their budget into the marketing itself rather than into the people running it.