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

Two ways to set a budget

Percentage of revenue

A common guideline is 5–10% of revenue, higher for businesses in growth mode or competitive markets. It is simple but does not tell you whether the money will work.

Customer-based budgeting

1. Decide how many new customers you need each month.
2. Estimate your cost to acquire one customer from past data or a test.
3. Multiply to get the ad budget, then add management and content costs.
4. Check it against the customer’s lifetime value.

What the budget covers

• Ad spend on Google, Meta or LinkedIn.
• Agency or freelancer fees.
• Content: photos, videos, design.
• Tools: CRM, email or WhatsApp software.
• Website and landing page improvements.

Start with a test

Run a focused test for two to three months on one or two channels with clear tracking. Measure cost per lead and cost per customer, then increase spend on what works and cut what does not.

Do not forget free channels

Google Business Profile, reviews, referrals and organic social media cost time rather than money and often deliver some of the best returns for small businesses.