Small Business Marketing Budget Guide – How Much Budget is Required?

by Max
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Small Business Marketing Budget Guide – How Much Budget is Required

It can be quite the challenge to come up with an appropriate small business marketing budget. It goes without saying that you should have money set aside for marketing your small business, of course, but there is no single approach that works for all businesses. How much you’re setting aside depends on your objectives, the type of business you have, and the revenue generated thereby.

In order to have a more accurate idea of the kind of budget you need, then, it’s important to take into account the following factors explained in this complete guide to small business marketing budgets.

Research your Industry

The rule of thumb is that the average marketing budget for small businesses should be 2-5% of your revenue. That doesn’t sound like a lot, but it’s a figure that’s been painstakingly arrived at after many years of market research and feedback.

That said, it matters whether or not you are running a B2B (business-to-business) or B2C (business-to-customer) business. While a B2B business will stay within this 2-5% parameter, a B2C business might want to pump up their marketing budget to as high as 10%. This is because a B2C company needs to work harder to make sure their product is filtering through to target customers through various channels.

Beyond whether your business is B2B or B2C, it’s also worth considering the industry in which you operate. If you’re working in the packaged goods, consumer services or tech industries, chances are your marketing budget is going to be a higher percentage of your revenue – as much as 25% in some cases. If, on the other hand, you’re working in transportation, energy or manufacturing, then your marketing budget is going to be much lower (as low as 4%).

Establish Clear Goals – and Stick to Them

The most important thing with goals is that they are (a) measurable and (b) specific. It’s no use having marketing goals if they consist of vague, nebulous aims like “increase conversion rates considerably”. Set something concrete that you can measure against.

It’s important, then, to establish exactly what you want out of your marketing. Do you want more website hits? More visits to your mortar-and-bricks store? Increased conversions? Once you have an idea of what it is you want, it’s easier to establish a strategy to achieve that, as well as track that you are actually achieving what you are aiming for.

From there, you can think about your target customer base, and their wants and needs. How can you meet these? How will you go about doing so?

Once you’ve established your aim(s) and figured out what your customers want and how you will appeal to those wants, you are in a position to start thinking about your marketing strategy – and from there, the sort of marketing budget you’ll need.

Take Stock of your Potential Marketing Costs

Marketing costs are as complex and multi-faceted as any other business expense. When deciding upon a marketing budget, try to divide what you allocate according to the following considerations:

Taking Stock of Your Potential Marketing Costs to Decide on Your Small Business Marketing Budget
Taking Stock of Your Potential Marketing Costs to Decide on Your Small Business Marketing Budget

Social Media Marketing

Having a social media marketing budget doesn’t necessarily mean simply paying for ad space on Facebook on Twitter – and, in an ideal world, it shouldn’t mean this at all. Organic marketing created via interaction and engagement is much more valuable, and doesn’t cost a penny in advertisement fees.

However, that organic traffic generated still costs money in the form of the time and effort spent creating content that attracts potential customers. It’s therefore important to have a budget for content creation and for the time spent cultivating social media accounts (which may require specialized staff or, at the very least, man-hours from your existing staff).

Online Ads

Using Google Ads (or the next-gen AI equivalent, Google Performance Max) costs money, and some small businesses put aside as much as USD $1000 a month. Though paid ads are not as effective as organic traffic generated online, its usefulness as a marketing tool cannot be underestimated, and it should be factored into the average marketing budget for small businesses.

Your Business’ Website

Your business’ website is the hub of your online activity, and it needs to look good, be informative, and have everything that the average customer needs to understand and make use of your business.

A good business website needs consistent and fresh content, a striking design, a good UI, some way for the customer to engage (contact forms etc.) and – most importantly – analytic tools. This means potentially paying for someone to design and maintain the website, as well as hosting fees to keep it up and running.

One aspect you should not forget is to optimize your website to rank higher on search engines (SEO). There are many great tools out there that can help you with SEO. A firm favorite for doing SEO with WordPress is Semrush – the leading all-in one SEO solution out there. It makes it incredibly easy to find the right topics and keywords, and write SEO-optimized content.

Mass Mails

Mass Mails are an important online tool in the arsenal of any small business, and they should not be underestimated as a means for quickly getting information and promotions out to thousands (if not tens of thousands) of people.

Mass mails can be done, on a basic level, for free with platforms like HubSpot. However, even if you’re using the free account, you still need to account for the time and effort that goes into creating content.

Training Costs

If you’re keeping all your marketing costs internal, it pays to make sure your staff is trained in marketing methods and techniques. That means setting aside time and money in your small business marketing budget to ensure they’re properly trained.

Old Media

We may live in a bold new digital age, but that doesn’t mean that old media (newspapers, billboards, posters etc.) is obsolete. Making use of such channels is inevitably more expensive than digital marketing, however, so it’s a good idea to thoroughly research which traditional media channels will off the best ROI for your company.


Do not underestimate the draw of a good YouTube video! We live in an increasingly attention-deficit world, and the fact is that a short, snappy video is more likely to grab people’s attention than a long-form blog or the like. It’s therefore a good idea to invest in making videos related to your business, whether a straight advertisement or something more geared towards organic traffic, like a listicle-style or how-to video.

Mobile Marketing

The hot new thing in the world of marketing is mobile marketing.

People spend an increasing amount of time with their noses buried in their smartphones, and because smartphones are such a versatile device with so many applications, that means that the advertising possibilities are endless.

SMS and in-app ads are one thing, but the most important thing to bear in mind for mobile marketing is the creation of your own app. Building a dedicated business app is much cheaper than it was, and helps you cultivate an immersive and engaging user experience that will keep customers coming back. Push notifications make it quick and easy to keep customers in the loop, and you can even have a dedicated in-app payment option to make purchases convenient and easy.

Above all, it’s about convenience. As consumer titans like Amazon have shown, convenience is the single most important factor in keeping customers happy and contented.


A great source of organic traffic and potential customers, the humble blog has seen a massive upswing in popularity in recent years, as customers come to distrust conventional marketing more and trust organic (or less obvious) content marketing such as videos, graphics and blogs.

Blogs are a great way to get a high return on a small investment. You can write blogs yourself if you’re confident in your writing abilities; if not, it’s easy to purchase the services of a professional blogger who can produce quality content within your marketing budget.

As for the type of content you should put out: it should always be related to your area of expertise, and it should always be authoritative. Make sure that it’s content that cannot be found elsewhere, in order to draw in the maximum number of potential customers. If you’re able to find this sweet spot, then blogging is a great tool that should be factored into the marketing costs of anyone serious about taking their company to the next level.

Repurpose and Update Old Content

So you’ve got a YouTube channel that regularly pulls in high numbers of potential conversions and consistently provides a great ROI. That’s great! But it’s not excuse to rest on your laurels.

How else can you make use of that YouTube channel? Can you get a blog or two out of the same topic, to be put on your website or guest-published elsewhere with links to your site? Conversely, can one of your more successful blogs be made into a video for IG or YouTube? Do older videos need response videos or a re-edit to stay relevant?

It’s important to keep things fresh and relevant, and by paying attention to existing content, you’re signaling that you’re attentive to detail and do not engage in ‘fire-and-forget’ business practices. It’s therefore important to devote a portion of your small business marketing budget to this.

Decide on which Marketing Channels you’ll be Using…

No business needs to use every single marketing channel available to them, as some simply won’t be necessary or deliver a good ROI. It’s therefore important that the available channels are carefully reviewed and researched before a final decision is made on which ones are best used.

As previously mentioned, mobile marketing is the next big thing, and no small business can afford to neglect it if they’re serious about growing and bringing in new customers. Aside from working to establish a dedicated one-stop app that makes customers’ lives easier, it’s also a good idea to ensure that your business has a presence on other apps (whether paid or organic). YouTube and other Google channels, for example, can offer direct shortcuts to your app when your ads pop up in their apps.

But it’s also important that other channels are not neglected, including physical options. Though not all need be used, it’s a good idea to research which ones will be most effective for your business and to make use of them accordingly.

It’s also important to strike a balance and take into account omnichannel marketing options. For example, while most people will simply do their shopping online, around 84% of bricks-and-mortar shoppers still use their smartphones while shopping in-person to make decisions. It’s therefore a good idea to make sure that your app (or online presence) facilitates smooth channel-switching in order to make the user experience as smooth and hassle-free as possible.

… And Deprioritize Marketing Channels that are Not Working

Nobody likes to give up or admit defeat, but the fact of the matter is that sometimes it’s necessary to acknowledge that something isn’t working and to pull the plug. It doesn’t matter if you’ve invested a lot of time and effort into – for instance – your blog if it’s not working to pull new customers in. If you’re not seeing the ROI that you’d like from something, and analytics and research suggests that you won’t, then it’s time to either deprioritize that channel, or else give up on it entirely. Don’t keep throwing good money after bad – put it to use elsewhere.

Keep Track of your Costs and Adjust them Dynamically

Once your business (and your marketing) is up and running, you’ll have a better idea of what is working, what isn’t, and what needs tweaking. Analytics are key to this, and it’s important to make sure you’re using such tools to the extent of their capabilities. One firm favorite among marketing analytics tools is HubSpot – check out their all-in-one solution now.

Reassess your small business marketing budget on both a quarterly and annual basis. These give you a chance to see if you’re hitting your targets, and provide an overview on both a micro and macro scale that can be invaluable going forward.

It’s also a good idea to re-evaluate the performance of different marketing channels on a regular basis. This is where analytics are crucial, as they can give you important feedback on the performance of your ad campaigns and inform how you spend your small business marketing budget going forward. For instance: if you carry out a highly successful mass mail that nets a 150% ROI, but a paid Google ad produces nothing more than a handful of leads, then it’s time to apply that advice we gave in the last section and deprioritize the latter in favor of the former.

Similarly, a marketing budget for small businesses does not need to (and shouldn’t) be a static amount. Your business may be a seasonal one, or it may be affected by other factors that will result in different amounts of expenditure at different times. Ensure that your marketing department is able to dynamically adjust for such instances.

Try to Make Sense of your Customers’ Journey

If you can understand and accurately predict the path of a customer’s journey, you have an excellent template for how to develop your marketing strategy. A customer seldom, for instance, googles your business, clicks on your website and buys something. It’s much more nuanced than that – and so, too, should your approach be.

Your first approach is understanding how your customers come to be aware of your product in the first place (hence the classic “where did you first hear about us?” question you’ll find on a million customer surveys). Once you’ve figured out how that initial exposure comes about, you can tweak your marketing approach to make sure more potential customers hear about you in this way – or perhaps try to reach untapped new markets via fresh channels.

Again, it’s worth bearing in mind that organic traffic is always going to be better than that coming in via paid channels, so make full use of analytics to understand where your organic traffic is coming from and what you can do to bolster this. The more you understand where your customers come from and how they get to your product or service, the better you can attempt to replicate that experience for other potential customers.

Consider Hiring a Marketing Agency

Not everyone is a marketing whiz, nor do they have the time or inclination to become one. And that’s fine – much like you might hire a blogger or professional filmmaker for your blogs/videos respectively, you might also want to leave your overall marketing strategy (and the minutiae thereof) to a professional team that can ensure optimal return on your investment.

This sidesteps the need to recruit and train marketing staff within your own company, and therefore obviates a lot of potential headaches for you and your company. However, your marketing costs are going to go up considerably if you hire a specialist agency – outsourced marketing is not cheap.

It’s ultimately a question of how you want your small business marketing budget allocated, and whether or not it’s something you’d rather handle in-house or hire external experts for. As with any small business choice, it’s ultimately a matter of preference.


Ultimately, your marketing costs may or may not be the same as the average small business marketing budget – either way, that’s fine. The important thing is that you’ve arrived at a percentage of your revenue that works for your company and that is in line with your industry, target customer base, and revenue. If you do your research properly and discover the channels that work for your business, there’s no reason why you won’t see a strong, consistent ROI on your marketing costs. It’s all a matter of finding the right approach.

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