- Percentage-of-revenue benchmarks are a sense check, not a plan; most come from large companies.
- Goal-based budgeting works better: how many customers do you need, and what does each cost to win?
- Budget for people and tools as well as campaigns. Time is usually the biggest cost.
- Keep a share for testing, and review quarterly against cost per qualified enquiry.
How much should a small business spend on marketing?
The honest answer: enough to hit your growth target at a cost per customer you can afford. That sounds circular, but it's the right way round. A marketing budget should come from what you want marketing to achieve, not from a percentage someone else uses.
Percentage-of-revenue figures are still useful as a sense check. For context, Gartner's 2026 CMO Spend Survey found marketing budgets averaged 7.8% of company revenue. But most of the firms in that survey had annual revenue above $1 billion, so it describes large enterprises, not a 30-person B2B firm. Small businesses vary widely depending on their sector, growth plans, margins and how much they rely on referrals.
Two ways to set a marketing budget
1. Percentage of revenue
Pick a percentage of current or target revenue and spend that.
- Pros: simple; scales with the business; easy to explain.
- Cons: it ties marketing to last year's revenue rather than this year's goals, and it can starve growth when you most need it.
2. Goal-based (bottom-up) budgeting
Work backwards from what you want to achieve:
- Revenue goal from new business: for example, 300,000 of new annual revenue.
- Average first-year value of a new customer: for example, 15,000.
- New customers needed: 300,000 ÷ 15,000 = 20.
- Your conversion rates: if 1 in 4 qualified enquiries becomes a customer, you need 80 qualified enquiries.
- Cost per qualified enquiry by channel, from your own data (see customer acquisition cost), for example 250.
- Budget needed: 80 × 250 = 20,000, plus fixed costs such as people and tools.
(All figures are illustrative.)
If you don't have your own conversion and cost data yet, start with estimates, track the real numbers for a quarter, and adjust.
Use goal-based budgeting to set the plan, and the percentage of revenue to check it's realistic for the business.
What to include in a marketing budget
| Category | Examples | Notes |
|---|---|---|
| People | Marketing salaries, freelancers, agency retainers, a fractional CMO | Usually the largest cost; see outsourced marketing |
| Website | Hosting, maintenance, development, a redesign | Your main marketing asset; budget for upkeep, not just builds |
| Tools and software | CRM, email platform, analytics, website monitoring, design tools | Review annually for overlap |
| Content | Writing, design, photography, video, case studies | Often under-budgeted |
| Advertising | Search ads, LinkedIn, retargeting, directories | Variable; easiest to scale up or down |
| Events and sponsorship | Exhibitions, sector events, memberships | Include travel and staff time |
| Print and brand | Brochures, signage, merchandise | Keep only what supports sales |
| Testing reserve | New channels or campaigns to trial | A small fixed share, so experiments don't raid core activity |
Marketing budget template
Set it up by quarter, with planned and actual columns, so you can see where money went and adjust.
| Category | Item | Q1 planned | Q1 actual | Q2 planned | Q2 actual | Q3 planned | Q3 actual | Q4 planned | Q4 actual | Annual |
|---|---|---|---|---|---|---|---|---|---|---|
| People | Marketing salary (share) | |||||||||
| People | Freelance design | |||||||||
| Website | Hosting and maintenance | |||||||||
| Tools | CRM | |||||||||
| Tools | Email platform | |||||||||
| Content | Case studies (2 per quarter) | |||||||||
| Advertising | Search ads | |||||||||
| Events | Sector exhibition | |||||||||
| Testing | New channel trial | |||||||||
| Total |
Add three rows underneath to tie spend to results: qualified enquiries, new customers and cost per qualified enquiry, by quarter.
How to split the budget
A practical approach for a small B2B firm:
- Foundations first: a website that works, accurate listings, tracking and a CRM. These make every other pound more effective.
- Always-on activity: the channels that reliably produce qualified enquiries for you, such as search, your Business Profile, referrals and email.
- Campaigns: time-bound pushes around launches, events or seasonal demand.
- Testing: a small, ring-fenced share to try something new each quarter, judged on cost per qualified enquiry.
Review it quarterly
Each quarter:
- Compare planned with actual spend.
- Compare cost per qualified enquiry by channel.
- Move money from channels that cost more and produce worse enquiries to those that perform better.
- Decide whether this quarter's test earns a permanent place.
Our guide to marketing KPIs includes a monthly report that feeds straight into this review.
Questions
How much should a small business spend on marketing?
Enough to reach your growth goal at an affordable cost per customer. Work out how many new customers you need and what each costs to win, then sense-check the total against revenue. Large-company benchmarks average under 10% of revenue, but small firms vary widely.
What percentage of revenue should go on marketing?
There's no universal figure. Gartner's 2026 survey of mostly very large companies found an average of 7.8%. Use your own growth goals and cost per customer to set the number, and percentages only as a check.
What should be included in a marketing budget?
People (including agencies and freelancers), the website, tools and software, content, advertising, events and a small reserve for testing new channels.
How do I create a marketing budget template?
List each cost by category in rows, with planned and actual columns for each quarter and an annual total. Add rows for qualified enquiries, new customers and cost per qualified enquiry so spend is tied to results.
Should a marketing budget be based on revenue or goals?
Goals. Budget for what you need to achieve, using your conversion rates and cost per customer, then check it's realistic as a share of revenue.
Every guide is checked against the platform it describes before it’s published, and re-checked when the platform changes.