Articles
How Much Should a Small Business Spend on Marketing?
There Isn’t One Marketing Budget That Works for Every Business
One of the most common questions small business owners ask is:
“How much should I spend on marketing?”
The answer depends on your business.
A new business launching for the first time will have very different marketing requirements from an established company trying to scale.
Instead of choosing a random percentage of your revenue, start by understanding what you need your marketing to achieve.
Start With Your Business Goal
Your marketing budget should support a specific objective.
For example:
- Launching a new business
- Increasing website enquiries
- Generating leads
- Increasing bookings
- Building brand awareness
- Entering a new market
- Launching a new product
- Increasing repeat purchases
Without a clear goal, it becomes difficult to know whether your marketing spend is working.
Don't Spend Money on Every Channel
Small businesses often make the mistake of trying to be everywhere.
Facebook.
Instagram.
TikTok.
LinkedIn.
Google Ads.
SEO.
Email.
Events.
Influencers.
The result can be a lot of activity without a clear return.
You don’t necessarily need every marketing channel.
You need the channels that make sense for your customer and your buying journey.
Understand Your Customer First
Before deciding where to spend money, understand how your customers find businesses like yours.
Ask:
Where do they search?
What information do they need before buying?
Who influences their decision?
How long does it take them to make a decision?
What problem are they trying to solve?
A local restaurant may benefit heavily from Google visibility, reviews, social media and local discovery.
A B2B consultancy may need LinkedIn, SEO, thought leadership, networking and a strong website.
The right marketing mix depends on the business.
Your Website Is Part of Your Marketing Budget
Marketing doesn’t stop when someone clicks your advert.
If you spend money generating traffic but your website doesn’t convert visitors into enquiries, part of your marketing investment is being wasted.
Your website should clearly communicate:
- Your offer
- Your target audience
- Your value
- Your credibility
- Your services
- Your customer journey
- Your next step
Sometimes improving the website can be more valuable than simply increasing advertising spend.
Track More Than Likes
Likes and followers can be useful indicators of engagement, but they aren’t the only measures that matter.
Depending on your business, you may want to track:
- Website visitors
- Enquiries
- Leads
- Bookings
- Conversion rate
- Cost per lead
- Customer acquisition cost
- Revenue generated
- Repeat customers
Your marketing budget should ultimately be connected to business outcomes.
What If Your Budget Is Small?
A smaller budget doesn’t mean you can’t market effectively.
It means you need to prioritise.
Start with the foundations:
1. Clear positioning
Make sure people understand what you offer.
2. Strong website
Give potential customers somewhere credible to learn and take action.
3. Search visibility
Make it easy for people already looking for your services to find you.
4. Content
Answer the questions your customers are already asking.
5. Measurement
Track what generates enquiries and sales.
Then increase investment in the areas producing meaningful results.
Final Thoughts
There is no magic marketing budget that guarantees growth.
The better question is:
“What should my business invest in to achieve its next growth objective?”
At LJC Marketing, we help businesses identify where their marketing budget can create the most value rather than simply encouraging them to spend more.
Need help creating a marketing strategy for your business?
