Many small business owners wonder, “how much should a small business budget for marketing?” It is a common question because money is tight, and you want every dollar to bring in more customers. The good news is there are clear guidelines based on what real businesses do. Most experts say to spend between 5% and 12% of your yearly sales on marketing. This helps you stay safe while still growing. In recent years, like 2025 data shows, averages sit around 7-8% for many companies. But your exact amount depends on things like how new your business is, what industry you are in, and what goals you have.
Why You Need a Clear Marketing Budget
Marketing is like planting seeds for future sales. Without it, fewer people find out about your shop, services, or products. A good budget keeps things balanced. Spend too little, and growth slows down. Spend too much, and you might run out of cash for bills or supplies. The key is to base it on your sales numbers so it grows with your business.
Think of it this way. If your business makes $200,000 a year, a 10% budget means $20,000 for the whole year. That breaks down to about $1,667 each month. You can use that money for ads, social posts, emails, or a simple website update. Many owners start here and adjust as they see results.
Main Things That Change Your Marketing Budget
A few simple factors help decide how much a small business budget is for marketing. Look at these one by one:
- How New or Old Your Business Is: New businesses or startups often spend more, like 10-20% of sales, to get noticed fast. Older, steady businesses can do fine with 5-10%.
- Your Type of Business (B2B or B2C): Businesses that sell to other companies (B2B) usually spend less, around 4-8%. Those that sell straight to people (B2C) need more reach, so 8-15% is common.
- Your Industry: Some fields need bigger spends. For example, tech or healthcare might go higher, while simple retail or services stay lower.
- Your Growth Goals: Want to stay the same size? Stick to 6-8%. Want to grow fast? Push to 12% or more for a while.
- Your Sales Level: Smaller sales under $1 million often mean higher percentages to build up. Bigger ones can drop the percent but still spend good money.
Also, ask yourself: Does marketing budget include salary? Yes, if you or an employee spends time on marketing tasks. Add costs for tools, ads, photos, or help from others.
What Percentages Do Most Small Businesses Use?
Here are the main numbers from recent studies and expert advice in 2025 and 2026:
- Basic Rule for Most Small Businesses: 7-10% of yearly sales. This is a safe spot for many owners who want steady growth.
- For New or Fast-Growing Businesses: 10-20%. This helps build your name and get first customers quickly.
- For Steady, Mature Businesses: 5-10%. Focus on keeping happy customers and small improvements.
- Overall Average from Big Surveys: Around 7.7% of sales, based on reports from groups that study thousands of companies.
These numbers come from places like Gartner surveys and small business reports. For example, if you earn $300,000 a year, 8% means $24,000 for marketing. That is enough for good online ads, some social help, and basic content.
Real Dollar Amounts: Monthly and Yearly Examples
People often ask, “how much does advertising cost for a small business per month?” It changes, but here are easy examples:
- Small Start Budget: $500 to $2,000 each month. This covers free social posts, cheap email tools, and small paid ads.
- Medium Budget: $2,000 to $5,000 per month. Add better ads on Google or Facebook, plus photos or short videos.
- Bigger Push Budget: $5,000 or more per month. Hire help, run bigger campaigns, or try new things like events.
Yearly, many small businesses spend $20,000 to $80,000 total on marketing. Some reports say the average advertising part alone is around $78,000 for small firms in recent years, but that includes bigger ones too. Most local shops aim lower.
How much do companies spend on advertising per month? Small ones often put $1,000 to $3,000 just on paid ads. The rest goes to other marketing like emails or website work.
Big companies spend more overall, but their average marketing budget for large companies is still around 7-10% because their sales are huge.
How Different Industries Set Their Budgets
Average marketing budget by industry helps you see what others do. Here are some common ones:
- Retail Shops: Often 8-12%. They use ads to bring people in the door or online.
- Tech or Software: 10-20%. They focus on online content and searches to find users.
- Services like Consulting: 8-15%. They build trust with posts, emails, and networking.
- Healthcare or Professional: Up to 10-18%. They need to show they are safe and helpful.
- Manufacturing: 5-10%. More focus on trade shows or direct business contacts.
For a quick marketing budget example, say you run a small coffee shop with $150,000 in sales. At 10%, you have $15,000 a year. Split it like: $6,000 on local social ads, $4,000 on signs and flyers, $3,000 on email deals, and $2,000 on photos or menu updates.
You can find free marketing budget sample pdf files online to copy and fill in your own numbers.
Step-by-Step: How to Make Your Own Budget
Building your plan is easy if you follow these steps:
- Look at Your Sales Numbers: Add up last year’s total or what you expect this year.
- Pick Your Goal: Do you want to keep things the same, grow a little, or grow a lot?
- Check What Others Do: Look at your industry averages to get ideas.
- Split the Money: Put about half on online ads and tools, some on content like posts or videos, and some on help if needed.
- Watch and Change: Every few months, see what works best and move money around.
Put this plan in your marketing budget in a business plan so everyone understands it.
Smart Ways to Market When Money Is Tight
You do not need a big budget to get results. Try these ideas:
- Use free tools like social media pages to talk to customers every day.
- Make your own simple posts or photos instead of paying others.
- Start with small tests on ads to see what brings people in.
- Team up with other local businesses for shared events or shout-outs.
One owner might spend just $800 a month on targeted Facebook ads and get 15-25 new customers. Small steps add up when you track them.
For better tracking of calls and chats, check out tools like conversational analytics software to see what really works.
Mistakes Many Owners Make and How to Skip Them
Avoid these common slips:
- Forgetting extra costs like ad fees or software payments.
- Not checking if the money brings back more sales.
- Trying too many things at once instead of focusing on a few good ones.
- Not counting time spent by you or staff on marketing tasks.
Start small, learn what works, and grow from there. You will feel more sure each month.
Real Stories from Small Businesses
A local repair shop with $400,000 in sales set 9% ($36,000 yearly). They put most on Google ads and got double the calls in six months.
A new online store with $80,000 sales spent 15% ($12,000). They focused on social videos and grew sales by 50% the next year.
These show that the right budget, even small, makes a big difference when it matches your goals.
Tie Marketing to Your Whole Business
Your marketing money should help your main sales targets. Include it in your business plan so it fits everything else. If you have an office team, a nice setup like solid wood office furniture can help everyone work better on ideas.
Common Questions About Small Business Marketing Budgets
How much should a small business budget for marketing
if sales are low, like under $100,000? Try 10-15% to build up fast.
What is a good marketing budget example for $400,000 sales?
At 9%, that’s $36,000—split on ads, content, and tools.
Does the marketing budget include salary?
Yes, count any pay for marketing work.
How much does advertising cost for a small business per month?
Usually $500-3,000 to start seeing good results.
What is the average marketing budget by industry for services?
Often 8-12%.
Wrapping It Up: Find the Right Amount for You
To answer how much should a small business budget for marketing, most do well with 7-10% of sales, but go higher (10-20%) if you are new or pushing hard for growth. Use your sales numbers, check your industry, and track what brings customers. Start simple, test things, and adjust as you learn. A smart budget helps your business grow steady and strong.
What part of your marketing do you want to try first, or what is your current budget like? Share in the comments!
References
- Succeeding Small: Small Business Marketing Budget – Gives clear percentages, B2B vs B2C differences, and industry examples for owners who want real numbers.
- Reddit Discussion on Typical Marketing Budgets – Real talks from marketers and business people sharing what they actually spend.
- BDC: Average Marketing Budget for Small Businesses – Helpful ranges for B2B and B2C, plus factors to think about when planning.
These links give practical help for small business owners, startups looking to grow, marketing helpers, and people checking industry standards. They use real data to make decisions easier.