TL;DR:
If you’re not sure how much to budget for marketing, you’re not alone. Here’s a practical breakdown of what small business owners are actually spending, where that money goes, and how to make sure you’re not throwing it away.
Most Businesses Are Underspending—Here’s Why That’s a Problem
The pattern is familiar: you launch a site, post occasionally on social, maybe test a Facebook ad or two—and when leads dip, you either overspend in a panic or pull back entirely.
But here’s the thing: marketing isn’t optional. It’s how people find you. And if you’re still treating it like an extra, your competition is going to win—slowly and quietly.
Your small business marketing budget doesn’t need to be massive. It just needs to be intentional.
What the Data Says: How Much Should You Spend?
According to the U.S. Small Business Administration, businesses with under $5 million in revenue should allocate 7–8% of gross revenue to marketing if they want to maintain visibility—and closer to 10–12% if they want to grow.
| Annual Revenue | 7% Budget | 12% Budget |
|---|---|---|
| $100,000 | $7,000 | $12,000 |
| $250,000 | $17,500 | $30,000 |
| $500,000 | $35,000 | $60,000 |
These numbers might sound aggressive, but when you break it down monthly—and compare it to lost leads from not showing up online—it’s often far more affordable than you’d think.
What Should Your Marketing Budget Actually Cover?
Here’s a realistic breakdown we use with clients:
Website + SEO (25–30%)
Your website is the digital front door. If it’s outdated or invisible in search, you’re losing clients before they even knock. Check out our guide on how to build a lead-generating website for contractors to see the strategy we use for service-based businesses.
PPC & Paid Ads (20–30%)
Google and Facebook ads can be powerful tools—when managed well. But most local businesses overspend on bad targeting or generic copy. Our post on Google PPC for real estate pros breaks down how we structure cost-effective, local campaigns that convert.
Social Media + Content (15–20%)
Consistent posting builds trust. Strong visuals and helpful content show potential clients what to expect. We shared a sample schedule in this post on crafting an effective Facebook posting strategy, but it applies to nearly any local business.
Photo & Video (10–15%)
If you want to look like a premium brand, your visuals need to reflect that. We recently worked with a regional storage company that saw measurable engagement from a short-form video series and updated listing photos. Here’s how that came together in our client case study.
Strategy + Reporting (5–10%)
This is what makes the rest of your spend worth it. Regular reviews of traffic, lead sources, and ROI help you double down on what’s working. Skipping this part is how budgets get wasted.
Sample Budget: $1,000/Month
If you’re working with $1,000/month, here’s how we’d structure it:
| Category | % of Budget | Monthly Spend |
|---|---|---|
| Website + SEO | 30% | $300 |
| Paid Ads | 30% | $300 |
| Photo/Video | 15% | $150 |
| Content + Social | 20% | $200 |
| Strategy + Reports | 5% | $50 |
Every dollar should work together: the SEO supports your blog content, the photos power your ad creative, the reporting shows which efforts bring leads.
Want to Stretch That Budget Further?
The key to getting the most out of your small business marketing budget is stacking high-impact, reusable content:
- A great video walkthrough? Use it on your site, in a Reel, and as a Facebook ad.
- A well-written blog post? Optimize it for SEO, turn it into an email, and clip quotes for captions.
We covered this in our recent post on low-budget marketing ideas for builders and contractors, but the approach applies to any service-based business looking to stay visible without overspending.
What Happens If You Do Nothing?
The short version: your competitors catch up. Your name gets skipped. Your referrals dry up.
And if you think marketing isn’t necessary for “boring” industries—storage units, home services, consulting firms—those are often the easiest to stand out in. Smart content and strong visuals go a long way when the baseline is low.
If you want a practical conversation about where to start, we’ll walk through it with you. No pressure. No sales pitch. Just a clear-eyed look at what’s possible with the budget you already have.