One marketing agency tells you to spend £2,000 a month. A social media specialist says £500 is plenty. Somebody else recommends spending a fixed percentage of turnover, even though your margins are tight and you aren’t sure where your next customer will come from. It’s difficult to budget sensibly when every supplier has a different answer.
There isn’t a universal amount that every UK small business should spend on marketing. Your budget should reflect your margins, growth targets, customer value, capacity and the channels you can realistically measure. A £500 monthly spend may be too much for one business and nowhere near enough for another. Here’s how I’d work out a practical starting point.
Start with what a new customer is worth
Before choosing a marketing number, estimate what a typical new customer contributes after the direct costs of supplying the work. A £1,500 project isn’t £1,500 of profit if materials, subcontractors and delivery time account for most of it.
Think about repeat business too. A one-off repair and a long-term maintenance client can have very different commercial value. You don’t need a perfect financial model, but you should understand whether acquiring a customer for £100 is sensible or completely unaffordable.
Work backwards from the number of customers you need
Suppose you want four additional worthwhile customers per month and usually win one in four suitable enquiries. You’d need roughly sixteen suitable enquiries, assuming that conversion rate remains similar. Now ask how many of those you could reasonably expect from existing referrals, repeat work and marketing.
This is an illustrative calculation, not a forecast. It forces you to define an outcome. “More followers” isn’t a substitute for knowing how much work you can take on or what that work is worth.
Should your budget be a percentage of turnover?
You’ll find plenty of articles presenting marketing percentages as rules. Treat those figures as starting conversations, not instructions. A new business investing in growth may spend a greater share of revenue than an established company with repeat customers. Two businesses with identical turnover can have completely different margins.
If you use a percentage, test it against actual cash flow, target customers and capacity. Don’t commit to recurring spending because a chart says businesses “should” do it. Cash needed for wages and suppliers doesn’t become spare marketing money because somebody recommended a benchmark.
Separate one-off improvements from monthly activity
A website rebuild, a new set of service pages and a photography session are different investments from paying for advertising or ongoing SEO. Put them into separate parts of your plan. Otherwise you’ll underestimate the work involved or assume the same amount needs spending forever.
For example, fixing confusing website design might improve the performance of every channel sending people to your site. That isn’t the same as committing to a twelve-month advertising budget. Spend on foundations when they are genuinely holding the business back.
Where should a small business spend its first £500?
There isn’t a universal shopping list. If your Google Business Profile is incomplete, your website has broken forms and you have no customer testimonials, paying for an expensive content campaign is unlikely to be the best first move.
I’d look for inexpensive work with a direct customer benefit: accurate business details, a clear service page, useful proof of work and a reliable enquiry process. Then decide whether there’s money left for a focused paid test or professional help. An established specialist firm may need a completely different allocation.
What if you have £1,000 or more each month?
A larger budget creates room to test and improve, but it also makes it easier to fund mediocre work for longer. The distinction between SEO and paid search can help you decide where an initial test belongs. Choose a main objective, such as generating enquiries for a profitable service in one area. Agree what the supplier will deliver and how you’ll judge progress.
- Define the target customer and service before choosing a channel.
- Keep a reserve for unexpected fixes or improvements.
- Include management fees when evaluating paid advertising.
- Review lead quality and resulting work, not just reported activity.
- Make sure the spend can be sustained long enough to learn.
Don’t forget the cost of your own time
Posting daily, editing a website, learning advertising tools and responding to every platform notification can feel free because no invoice arrives. But an owner’s time has a cost. If three hours of marketing distract you from paid customer work, include that in your assessment.
Doing some marketing yourself can make perfect sense. Just be honest about which tasks you’re capable of doing well, which you enjoy and which would be more effective delegated. A cheaper activity isn’t necessarily better value if it never gets finished.
How do you know whether the money is working?
Record enquiries, their source where known, the percentage that become customers and the approximate value of the work won. Keep the method simple enough to use consistently. A small spreadsheet can tell you more than an elaborate reporting dashboard nobody understands.
Use my practical marketing measurement guide to decide what to track. If a supplier talks almost entirely about reach and impressions while you need actual bookings, ask them how their work connects to enquiries.
When should you increase or reduce spending?
Increase budgets when there’s evidence of profitable demand and you have capacity to serve extra customers. Reduce or redirect spend when the results are weak, the business can’t cope with extra work, or the original assumptions have changed.
Don’t judge SEO by a weekend’s data, and don’t keep paying for poor-quality leads just because an advertising campaign shows lots of clicks. Timeframes differ by channel. Review in a way that suits the purchase cycle and the work being done.
Three common budget mistakes to avoid
The first is buying disconnected services because each salesperson makes a convincing case. The second is giving all your money to acquisition while leaving a confusing website untouched. The third is having no clear stopping point or review process, so recurring payments become background noise.
Ask what will be delivered this month, why it matters and what you expect to learn. Sensible suppliers should be able to explain the work in plain English, including when results are uncertain.
Build a marketing budget around your business, not somebody’s package
Start with your margins, targets and current sources of work. Identify the one or two obstacles that make it hardest to win the right customers, and put money there first. A modest focused plan beats an impressive-looking list of activities that nobody can explain.
If your website or search visibility is part of the problem, book a call and tell me what you want the investment to achieve. I’ll give you a practical view of the work involved and whether it’s a sensible priority.