The first question every small business owner asks us is ‘how much should I spend on marketing?’ The honest answer: it depends. But there’s a simple framework that gets you 80% of the way there.
Start with revenue, not gut feel
Established business, not growing fast: 5–8% of revenue.
Established, actively growing: 8–12% of revenue.
Early-stage or aggressive growth: 12–20% of revenue.
Then allocate across the funnel
A balanced budget puts roughly 40% into demand generation (ads, content), 30% into conversion (website, CRO, email), 20% into retention (lifecycle, loyalty), and 10% into measurement and tools.
Measure CAC and LTV — even roughly
You don’t need a perfect model. You need to know roughly what a customer costs to acquire and what they’re worth over time. If LTV is 3x or more of CAC, spend more. If it’s under 2x, fix the offer before spending more.
Don't cut marketing in slow months
Counterintuitive but consistent across our clients: the businesses that maintain marketing investment through slower periods come out the other side much stronger.
