How much should a small business spend on marketing?
Somebody on the internet will tell you the answer is seven to ten per cent of revenue. For a sole trader turning over a hundred and fifty thousand, that is up to fifteen thousand dollars a year, which is a number invented by people who sell marketing. Here is a more useful way for an owner-operator to think about it.
Budget effort before dollars
In local services, the highest-returning marketing is mostly free and paid for in minutes, not money. A complete Soho’s listing and Google Business Profile: free. Asking each happy customer for a review: free. Photographing finished jobs: free. Keeping your details current: free. An owner-operator who does only these things, consistently, has a stronger marketing engine than one spending a thousand a month on ads over a hollow profile. The first budget question is not “how much money” but “which twenty minutes a week”.
The spending ladder
When money does enter it, spend in this order. First, small one-off costs that compound: decent photos, vehicle signage with your listing address on it. Second, visibility boosts where your customers already look, such as a featured listing that puts you above the free ones. Third, and only once the free layer is humming, paid ads to fill defined gaps: a quiet season, a new suburb, a new service. Each rung should earn its keep before you climb to the next.
Give every dollar a job and a deadline
The percentage-of-revenue rule fails small businesses because it budgets by formula instead of by purpose. Better: never spend on marketing without naming what the money is for and how you will know it worked. “Three hundred dollars this month to test whether ads bring bathroom renos in Penrith; success is two enquiries.” If it works, repeat. If not, stop without guilt. Marketing spend without a success test is a donation.
So, the actual number?
For most owner-operators: zero dollars and about an hour a week while the free foundation gets built, then small purposeful spends as the calendar and cash flow justify them. The businesses that fail at marketing rarely spent too little. They spent randomly.
Start where the return is highest
The free layer first. It also happens to be the layer that works hardest.
