Most small businesses should spend somewhere between 5% and 12% of revenue on marketing, depending on how fast they want to grow. At High Tide, we use about 5% to maintain your position, 7% for slow growth, 10% for fast growth and 12% or more for aggressive growth. Large-company surveys land in the same range, at roughly 8% to 9% of revenue in 2026.
That’s the short answer to how much a small business should spend on marketing. The better answer depends on your margins, your competition and what a new customer is worth to you. Below are the benchmarks, how to pick your number, and how to turn it into a monthly plan.
What the benchmarks say about marketing budget percentage of revenue
Two well-known surveys track marketing budget as a percentage of revenue every year.
| Source | Year | Marketing budget as % of revenue | Who they surveyed |
|---|---|---|---|
| Gartner CMO Spend Survey | 2026 | 7.8% | 401 marketing leaders, mostly at companies with $1B+ revenue |
| The CMO Survey (Duke, Deloitte, AMA) | 2026 | 9.0% | 308 U.S. marketing leaders, VP level or higher |
The CMO Survey’s 2026 report also breaks spending out by business type. B2B services companies reported marketing at 10.1% of revenue, and B2C services companies at 7.2%.
Keep in mind who answers these surveys. Both skew toward larger companies with full marketing departments. A small business often needs a higher percentage because it’s building awareness from a smaller base, and fixed costs like a website and tracking take up a bigger share of the budget.
You may also have heard that the U.S. Small Business Administration recommends a specific percentage. Its current marketing and sales guide doesn’t give one. It tells owners to break down every marketing cost in the plan and compare those costs to the revenue they produce, which is good advice whatever percentage you choose.
High Tide’s growth bands
When owners ask us what they should spend, we start with one question. What do you want the next 12 months to look like? Then we match the budget to the goal.
| Goal | Share of revenue | Example at $1M revenue | What it usually covers |
|---|---|---|---|
| Maintain | About 5% | $50,000 a year | Website, Google Business Profile, reviews, steady SEO, light ads |
| Slow growth | About 7% | $70,000 a year | The above, plus consistent paid search and regular content |
| Fast growth | About 10% | $100,000 a year | Multiple channels running together, including video and social |
| Aggressive growth | 12% or more | $120,000+ a year | New markets, new locations or a push to take share from competitors |
These bands include everything you spend on marketing: ad spend, agency or freelancer fees, software, content production and any marketing staff.
How to pick your band
A few factors push you up or down:
- Margins. A med spa or law firm with strong margins per client can afford a higher percentage than a restaurant with thin margins.
- Customer lifetime value. A dental patient may stay for years. A one-time landscaping install is worth less over time unless you sell maintenance plans.
- Competition. Personal injury law in a big metro costs far more to win than accounting services in a smaller town.
- Stage. A new business or a new location has no reputation or reviews yet, so it usually needs to spend at the higher end for the first year.
- Capacity. Don’t budget for 40 new clients a month if you can only serve 20.
For example, an established accounting firm with a full client roster may sit comfortably at 5% to 7%. A chiropractor opening a second office would likely need 10% to 12% for the first year to fill the new schedule.
Work backward from cost per lead
Percentages give you a starting range. Cost per lead math tells you whether that range can hit your goal.
Here’s the formula, using made-up numbers for a law firm:
- New clients wanted per month. 8
- Close rate from lead to client. 25%
- Leads needed per month. 8 divided by 0.25 equals 32
- Expected cost per lead. $150 (use your own history, or your agency’s estimate for your market)
- Monthly lead generation budget. 32 leads at $150 each equals $4,800
Then sanity-check it against what a client is worth. If an average client brings in $5,000 in fees, eight new clients produce $40,000 a month from $4,800 in lead costs. If your average client is worth $400, the same plan loses money, and you’d need a cheaper channel or a better close rate.
Track your real cost per lead by channel every month. Within a quarter you’ll know which channels earn more budget and which should lose it. Our post on whether SEO is worth it for small business shows how to run the same math on organic search.
How to split the budget across channels
There’s no universal split, but most local and service businesses do well dividing money into four buckets.
- Foundations. A fast, clear website, a complete Google Business Profile, call and form tracking, and review requests. Fund these first, because every other channel sends people here.
- Demand capture. People already searching for what you sell. This usually means SEO and Google Ads.
- Demand creation. People who don’t know they need you yet. Social media, video and paid social build awareness and trust over time.
- Retention and referrals. Email, follow-ups and reviews that bring customers back and send friends your way.
As a rough starting point, a business at the “slow growth” band might put most of its money into foundations and demand capture, then shift more toward demand creation as those channels mature. For context, Gartner’s 2025 survey found paid media made up 30.6% of the average marketing budget at large companies.
Give each channel a clear job and a number to hit. If it helps, read our guide on giving every marketing channel a job.
Plan for seasonality
An even monthly budget rarely matches how customers buy. Shift money toward the months when demand rises, and start four to eight weeks early so ads, content and reviews are working when buyers show up.
- Landscapers see demand build in late winter and spring.
- Gyms get a January surge and often a smaller one before summer.
- Accountants are busiest from January through April.
- Boutiques and restaurants often depend on the holidays and local events.
- Med spas often see interest rise before summer and the holidays.
Keep a base level running in slow months. Turning everything off makes it harder and more expensive to restart, especially for SEO and reviews.
Common budget mistakes
- Spending on ads before the foundations work. Paying for clicks to a slow, confusing website wastes money.
- Judging channels too early. Paid ads can show results in weeks. SEO usually takes months.
- Ignoring tracking. Without call and form tracking, you can’t calculate cost per lead.
- Cutting first when things get tight. The 2026 CMO Survey found that when profits fall short and companies cut costs, marketing is cut 45.4% of the time over other expense categories. Cut the weakest channel, not all of them.
- Hiring before planning. Choose your goals and budget first, then find the right partner. Here’s our guide to choosing a marketing agency.
Build your 12-month budget with our free planner
Our free marketing budget planner does this math for you. It’s a Google Sheet that builds a 12-month marketing budget from your numbers, plus a benchmark report so you can see how your plan compares. Use it to test different growth bands before you commit to one.
Frequently asked questions
What percentage of revenue should a small business spend on marketing?
Most small businesses land between 5% and 12% of revenue. Use around 5% to maintain your position and 10% or more if you’re pushing for fast growth, opening a location or entering a competitive market.
Is spending 10% of revenue on marketing too much?
Not if you’re aiming for fast growth and the numbers work. If your cost per lead and close rate show a healthy return on each dollar, 10% can be a smart investment. If you can’t measure the return yet, fix tracking before you raise spend.
Should a new business spend more on marketing?
Usually, yes. A new business has no reviews, rankings or word of mouth yet, so it often needs to spend at the higher end for the first year or two, then settle into a lower percentage once referrals and organic traffic build.
What counts as part of the marketing budget?
Everything you spend to attract and keep customers: ad spend, agency and freelancer fees, website costs, marketing software, content and video production, and the salaries of anyone working on marketing.
Get a second set of eyes on your budget
If you’d like help choosing a number and deciding where it should go, book a discovery call. In 30 minutes we’ll look at your goals, your current spend and what’s working, and you’ll leave with a clearer plan for the next 12 months.
