How to create a marketing budget for your small business

A marketing budget is the money you set aside to promote your business over a set period. Without one, you risk spending too much on channels that do not work or too little to make any real difference. The challenge for most small business owners is knowing where to start and what a sensible figure looks like.

How much should you spend on marketing?

A common guideline for small businesses is to spend 7 to 12 per cent of your revenue on marketing. A business turning over GBP 100,000 a year would budget between GBP 7,000 and GBP 12,000. A younger business or one in a competitive market might push closer to 15 per cent, while a well-established business with repeat customers can sit at the lower end.

The figure is a starting point. The right amount for your business depends on your goals, your market and how much you can afford to invest before seeing results. What matters more than the percentage is having a plan for how the money is split and how you measure whether it is working.

Start by reviewing last year

Before setting next year's budget, look at what you spent last year and what it produced. How many enquiries came from each channel? What was the cost per lead on paid ads? Which blog posts or social posts drove enquiries? If you have Google Analytics or a client dashboard, that data tells you where to put more money and where to cut.

If you are starting from scratch with no past data, begin conservatively and treat the first three months as a testing period. Put a modest budget behind Google Ads, create some content and see which channel generates enquiries at a price you can live with.

Split the budget across channels

A healthy marketing budget covers multiple channels. The split depends on your business type and where your customers look for you. A local service business might spend more on local SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. and Google Ads. A product business might invest in social ads and content marketing.

Here is a worked example for a business turning over GBP 120,000 a year with a 10 per cent marketing budget (GBP 12,000 total or GBP 1,000 a month):

SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. and content: GBP 500 per month. Covers ongoing optimisation, blog content and link building. Victory Digital's SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. packages start at GBP 980 per month and include 15 hours of specialist time covering keyword research, technical fixes, content creation and reporting. The free SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. report at https://victory.digital/run-a-seo-report is a good starting point to see where your site stands.

Paid ads: GBP 300 per month. A starting budget for Google Ads or social ads, managed properly. Our digital marketing packages that include PPCPPC stands for Pay Per Click — an online advertising model where advertisers pay a fee each time their ad is clicked. start at GBP 849 per month. We helped Home Instead achieve a 3,446 per cent increase in ad conversions through managed campaigns.

Social media content: GBP 100 per month. Could cover visual assets, a scheduling tool and occasional boosted posts.

Design and brand assets: GBP 50 per month. A stock budget for occasional assets, new banners or seasonal graphics.

Testing and tools: GBP 50 per month. Small experiments on new channels or ad formats.

The exact split matters less than having one. You adjust the proportions as you learn what works.

Account for people and tools

Marketing spend is not just ad platforms. The time you or your team spend on content, design and managing campaigns has a cost. Factor in any subscriptions too: analytics tools, email marketing platforms, scheduling software and design tools. If you use a dashboard like Victory Digital's client portal to track results, that is part of your operational budget rather than an extra.

What results should you expect?

SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. and content take time. A realistic expectation is three to six months before organic traffic trends upward, with compound gains after that. Home Instead saw a 251 per cent increase in organic traffic through sustained SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. work. TrustATrader recorded a 400 per cent increase in leads through a combination of SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages., content and digital PR. Paid ads can deliver faster, but they stop the moment the budget runs out.

Review the budget quarterly

Set a fixed review point every three months. Compare what you spent against the enquiries and revenue each channel generated. Move money from underperforming areas toward what is working. A marketing budget is a living document, not a fixed plan. The business that reviews it quarterly adapts faster and wastes less.

If you would like help setting a marketing budget that fits your business, our team plans and manages digital marketing for small businesses across the UK. Start with a free SEOSEO stands for Search Engine Optimisation — the practice of improving a website's visibility in search engine results pages. report at https://victory.digital/run-a-seo-report or book a discovery call at https://victory.digital/book/discovery-call.