Glossary / Marketing Budget
Marketing Budget
A marketing budget is the amount you commit to winning customers over a period, usually set as a share of revenue. Most small businesses land between five and ten percent of revenue.
Work out yours
Marketing budget = monthly revenue × target percentage
$836/mo
That is $10,032 a year committed to winning customers.
Why it matters
A percentage keeps spending proportional so it scales with you instead of becoming a fixed cost that hurts in a slow month. It also stops the far more common failure, which is spending nothing for months and then panic buying ads during a downturn.
Where people get it wrong
Percentage of revenue is a starting point, not an answer. If your LTV to CAC ratio is strong, the right budget is more than the benchmark. If it is thin, the right budget is zero until the ratio improves.
If this number is not where you want it
A small consistent budget aimed at local search beats a large sporadic one aimed at everything. It is also the cheapest place a local business can start.
Local Search and Map Presence, $300 a month
See what it would take, free →About Local Search and Map PresenceRelated terms
- LTV to CAC RatioThe LTV to CAC ratio compares what a customer is worth to what they cost to win.
- Customer Acquisition Cost (CAC)Customer acquisition cost is what you spend, on average, to win one new customer.
- Break-Even PointYour break-even point is how much you must sell to cover all your costs.
- Local VisibilityLocal visibility is how easily someone nearby can find you when they search for what you sell.
Common questions
+ What percent of revenue should a small business spend on marketing?
Five to ten percent is the usual range, higher if you are trying to grow quickly and your acquisition math already returns.
Part of the small business glossary. All six free calculators are here.