If you're a small or medium-sized business owner wondering how much you should spend on marketing, the honest answer is that it depends on your revenue, your growth goals, and what you're already getting from the channels you're in. There are published benchmarks worth knowing, though, and a straightforward way to turn them into a number you can work with.
At Momentum Marketing, we help service-based businesses like contractors, roofers, pest control companies, and local professionals make strategic decisions around budget and marketing performance. This guide walks through how to calculate a marketing budget and make it work for your growth goals. Once you have your number, our companion post on how to create a marketing budget for your small business covers the step-by-step build process.
Why Your Marketing Budget Matters
Your marketing budget sets the ceiling on your brand visibility, your lead generation, and how fast you can grow. Without a defined budget, businesses often:
- Underinvest and limit their growth potential
- Overspend without clear tracking or ROI
- Skip essential channels like SEO, paid ads, or Local Service Ads
Creating a marketing budget helps you plan, prioritize, and scale with intention.
What the Published Benchmarks Actually Say
You'll see a "7-8% of revenue" rule quoted all over the internet, usually credited to the Small Business Administration. The SBA doesn't publish a recommended percentage of its own. Its guide, How to Get the Most From Your Marketing Budget, cites outside research instead: a Web Strategies analysis that put average marketing spend at 7.9% of revenue, with B2C service companies at 11.8% and B2B service companies at 6.9%. The same SBA guide cites Small Business Trends data putting average advertising spend at 1.08% of revenue.
The "10-12%" figure often attached to the SBA appears to be a misreading. In the widely circulated version of that rule, the 10-12% describes the net profit margin the business is assumed to have, not the share of revenue it should spend on marketing.
A fair planning range for a service business, then, is roughly 7% to 12% of gross revenue, with the upper end for companies in growth mode or launching new services. That number should cover:
- Website design and maintenance
- SEO and content marketing
- Paid advertising (Google Ads, LSAs, social ads)
- Branding and creative assets
- Marketing software and tools
Agency fees come out of the same pool, so factor those in early. We cover typical rates in our breakdown of how much marketing agencies charge.
Try Our Free Marketing Budget Calculator
To get a quick estimate based on your revenue and growth goals, try our Marketing Budget Calculator. It lets you adjust revenue and percentage targets and gives you a clear recommendation.
The SBA doesn't publish a marketing budget percentage of its own. Its guide cites a Web Strategies analysis putting average marketing spend at 7.9% of revenue, and B2C service companies at 11.8%.
get startedWhat Should Be Included in Your Marketing Budget?
Your budget will depend on your business size, goals, and industry, but here are the marketing services worth planning around:
1. Custom Website Design
Your website is your marketing foundation. Whether you're launching or redesigning, budget for:
- Strategy and branding
- Design and development
- Mobile optimization and performance
SEO helps your website rank organically for local and service-based searches. Costs can include:
- On-page SEO and content optimization
- Local SEO and GBP management
- Link building and technical improvements
Paid ads help drive immediate traffic. Your budget should include:
- Monthly ad spend (PPC)
- Ad management and optimization fees
- Landing page development
Ad money only earns its keep when you can see what comes back from it, so set up the tracking before you raise the spend. Our guide to measuring the return on your digital ad spend covers what to watch.
LSAs are cost-effective for local leads. Budget for:
- Pay-per-lead costs (varies by industry)
- Setup and ongoing management
Stay top of mind and build trust through:
- Regular social media posting
- Paid social campaigns
- Email campaigns and automation tools
Use data to make smarter decisions. Budget for:
- Reporting dashboards
- Lead tracking and analytics
- CRM tools
How to Choose the Right Budget for Your Business
Choosing a marketing budget takes more than plugging a percentage into a spreadsheet. Here's how to approach it:
- Define your growth goals. Are you maintaining your current client base, entering a new market, or launching a new service? Businesses looking to scale aggressively should allocate a higher percentage of revenue to marketing.
- Review historical spend and ROI. Look at what you've spent in the past, what worked, and what didn't. Were your previous SEO or paid ad efforts delivering qualified leads? Use that data to refine your priorities.
- Analyze your industry and competition. In competitive industries like roofing or pest control, staying visible in search results takes real spend. Research your competitors' online presence and advertising activity so you're not falling behind.
- Prioritize high-impact services. If your budget is limited, start with the basics. A strong website and foundational local SEO should come before advanced ad strategies, and you can layer in paid ads, LSAs, and email marketing as room opens up. Our Marketing Journey Planner lays out which channels to add at each revenue stage if you want that order mapped against your own numbers.
- Track performance and adjust monthly. A budget you set in January and never look at again will drift away from what's working. Use tools like our Marketing Dashboard to track leads, ad performance, and conversion rates, then move money each month toward the channels producing results.
- Use your website as a conversion engine. Money spent on ads is wasted if your site isn't built to convert. Before increasing spend, make sure your website design, mobile experience, and calls to action are in place. Learn more about conversion-focused web design.
Building a Budget That Fits Your Business
We build the plan around your revenue, your goals, and the channels that actually produce leads in your market, rather than sliding you into a preset package. If you want a second set of eyes on what you're spending now, start with our free budget calculator, take a look at what our services cost, then get in touch or call (207) 813-4735 and we'll walk through the numbers with you.
