You’re staring at next year’s budget, and there’s a line for marketing that feels like a guess. You want a number. A percentage you can defend to your partner, your board, or yourself, so you can stop second-guessing it.
Here’s the number everyone quotes. The U.S. Small Business Administration suggests businesses under $5 million in revenue put 7 to 8 percent of revenue into marketing, assuming healthy margins in the 10 to 12 percent range. Across the broader market, Gartner’s 2025 survey of marketing leaders put budgets at 7.7 percent of company revenue. So if you want a benchmark, there it is: somewhere around 5 to 10 percent of revenue, higher if you’re young and building a brand, lower if your margins are thin.
Now let me tell you why that number is the least useful part of this decision.
The percentage is a budget, not a strategy
A percentage tells you how big the pile is. It tells you nothing about whether the pile is being spent on the right things. That second question is where almost all the money gets won or lost.
Picture two businesses with identical revenue. One spends 8 percent and the other spends 4 percent. The 8-percent business pours it into a little of everything: a freelancer here, some ads there, a website refresh, a social calendar nobody reads. Busy. Expensive. The 4-percent business spends half as much, but every dollar is pointed at the one channel that actually reaches its buyers, and someone senior is watching the numbers.
Guess which one grows.
Activity without accuracy accomplishes nothing. You can hit the “correct” percentage and still set the money on fire, because the percentage was never the variable that mattered.
What is the spend actually buying?
Before you argue about how much, get specific about what. Most marketing budgets are a list of tactics with no diagnosis underneath them. The owner approved a social media retainer because everyone has social media. He approved ads because a competitor runs ads. None of it traces back to a clear answer about why the business isn’t growing the way it should.
That’s the work that comes first. What’s the actual constraint? Is it that nobody knows you exist, or that the people who know you aren’t buying, or that they buy once and never come back? Those are three different problems, and they call for three different budgets. The percentage can’t tell them apart. A diagnosis can. It’s the same reason a budget that feels like waste usually isn’t a spending problem at all.
The real variable is who’s steering it
Here’s the part that doesn’t fit on a spreadsheet. The same budget produces wildly different results depending on the judgment behind it.
A business owner who treats the marketing line like it’s his own money, because it is, will spend it differently than an account manager protecting a retainer. The question isn’t really “how much should I spend.” It’s “do I trust the person deciding where it goes.” Senior judgment steering a modest budget beats a big budget run on autopilot, every time.
That’s the case for a multiplier instead of more headcount or another vendor. Not someone who adds activity, but someone who makes the dollars you already spend land where they should, and leaves you more capable of running it yourself.
A better question than “how much”
So set the percentage aside, at least until you’ve answered the questions that decide whether any of it works. Start here. What is the one problem this spend is meant to solve? How will I know in 90 days whether it’s working? Who is making the allocation decisions, and do they have the judgment to make them?
Answer those, and the number tends to answer itself. You’ll usually find you can spend less than you feared, as long as you spend it on purpose. That’s the whole game. Not how much marketing you buy. Whether the marketing you buy is pointed at the right thing.
Frequently asked questions
How much should a small business spend on marketing?
A common benchmark is 7 to 8 percent of revenue for businesses under $5 million, per the SBA, assuming margins in the 10 to 12 percent range. Newer businesses building a brand may go higher, toward 15 to 20 percent. But the percentage matters far less than what the spend is buying and whether anyone senior is steering it.
What percentage of revenue should be spent on marketing?
Most guidance lands between 5 and 10 percent of revenue, with Gartner reporting an average of 7.7 percent across companies in 2025. Treat that as a starting range, not a target. A business spending 5 percent on the right channel will outperform one spending 10 percent on the wrong ones.
Why isn’t my marketing working even though I’m spending enough?
Usually because the budget was set before the problem was diagnosed. Spending “enough” on the wrong constraint produces activity, not growth. The fix is upstream: figure out what’s actually limiting the business, then point the budget at it.
Should a small business hire an agency, a freelancer, or someone senior to manage the budget?
It depends on the constraint, not the headcount. If the problem is execution capacity, hands help. If the problem is that no one is deciding where the money should go, you need senior judgment first. The wrong order wastes the budget you were trying to protect.