How Much Should a Small Business Spend on Marketing? A UK Budgeting Guide

It's one of the most common questions we get asked by small business owners, and honestly, there's no single number that fits everyone. Anyone who gives you a flat figure without asking about your business first is guessing. What we can offer is a proper framework — the same one we use with our own clients — so you can work out a sensible marketing budget for your business rather than picking a number out of thin air.

This isn't about chasing the cheapest option or throwing money at every channel going. It's about spending in proportion to your goals, your stage of growth, and what you can actually measure.

Why there's no magic percentage

You'll see plenty of blogs claiming businesses should spend exactly 7% of revenue on marketing. In reality, the right figure depends on things like:

• How established your business is and whether you already have repeat customers or referrals coming in
• How competitive your local market or industry is
• Whether you're trying to maintain steady enquiries or actively grow
• Your profit margins — a business with healthy margins can usually justify spending more to acquire a customer
• What's already working. If word of mouth is strong, your paid marketing budget might be smaller than a competitor starting from scratch

So think of percentages as a sense check, not a target to hit.

Sensible benchmarks to start from

As a general guide, many small and medium UK businesses work within these ranges:

• Established businesses (steady, profitable, want to maintain or grow modestly): around 5-10% of annual revenue
• Growing businesses (want a noticeable increase in enquiries or customers): around 10-15%
• New businesses or new locations (building awareness from nothing): often 12-20%, sometimes funded from startup capital rather than current revenue, because there isn't yet a revenue base to calculate a percentage from

If you're a tradesperson turning over £120,000 a year, that might mean a marketing budget somewhere between £6,000 and £18,000 annually, depending on your ambitions. That's not pocket change, but spread across the year it's usually far more manageable than it first sounds — and it should be treated as an investment with a return, not a cost to minimise.

Budgeting by goal, not by guesswork

If you want more local enquiries

Local service businesses — plumbers, dentists, accountants, salons — usually get the best return from a mix of a solid website, local SEO, and targeted Google Ads. These channels capture people who are already searching for what you do, which tends to convert better than broader brand advertising. If you're unsure where your current site stands, it's worth having it properly reviewed as part of your local SEO planning.

If you want to build long-term visibility

If you're playing a longer game — becoming the recognised name in your area or industry — a bigger share should go towards content, SEO, and consistent branding over many months. This is slower but compounds over time, unlike paid advertising which stops producing results the moment you stop paying for it.

If you need quick results for a launch or quiet period

Sometimes you need enquiries fast — a new location opening, a quiet month, a seasonal push. Google Ads is usually the quickest lever to pull here, because it can start generating traffic within days rather than months.

Where the budget should actually go

Once you've got a rough figure in mind, it helps to break it down by function rather than lumping it all together:

• Foundations: your website and hosting — the base everything else sends traffic to. If this is weak, every pound spent elsewhere works harder than it needs to.
• Visibility: SEO and Google Ads, to make sure people can actually find you when they're searching.
• Efficiency: marketing automation such as follow-up emails, booking systems and lead nurturing, so enquiries don't go cold while you're busy doing the day job.
• Proof: time or budget spent gathering reviews, case studies and testimonials, which make every other pound you spend more effective.

A common mistake is spending heavily on visibility while neglecting the foundations — driving traffic to a slow, outdated website is like advertising a shop with no sign above a locked door.

How to know if the spend is working

A marketing budget without measurement is just an expense. Before committing spend, agree with yourself (or your agency) what you're actually tracking:

• Number of enquiries or calls generated, not just website visits
• Cost per enquiry, so you can compare channels fairly
• Conversion rate from enquiry to paying customer
• Return on ad spend for any paid campaigns

You can see the kind of measurable outcomes this approach produces for other small businesses in our results and case studies pages — it's worth looking at how budgets translate into actual enquiries, not just impressions or clicks.

Common budgeting mistakes to avoid

• Spreading too thin: a little bit on everything (social media, SEO, print, radio) rarely beats committing properly to one or two channels that suit your customers.
• Treating marketing as optional in quiet months: cutting spend when business is slow often makes the slow period longer.
• No review process: budgets set once and never revisited waste money on channels that have stopped performing.
• Confusing cheap with affordable: the lowest-cost option is only affordable if it actually generates a return.

Bringing it all together

There's no universal answer to how much a small business should spend on marketing — but there is a sensible process: understand your goals, set a realistic percentage of revenue, split it across the right channels for your business, and measure what comes back. That's a far more useful approach than copying a competitor's budget or picking a round number because it feels safe.

If you'd like a second opinion on your current marketing spend, or help working out a realistic budget and plan for your business, take a look at our insights for more practical guides, or find out more about how we work. We're always happy to have an honest, no-pressure conversation — just get in touch and we'll talk it through properly.