How much should a small business spend on marketing? A UK guide for 2026

Most small businesses should work out their marketing budget from their own numbers, not a percentage they read somewhere: start with what a new customer is worth, how many enquiries turn into customers, and how many new customers you want. Rules of thumb can sanity-check the answer. Large companies spend about 7.7% of revenue on marketing, according to Gartner, and many advisers suggest 5 to 10% for small businesses, but your margins, goals and stage matter far more.

“How much should we spend on marketing?” is the question we hear more than any other. The honest answer is “it depends”, which isn’t much help on its own, so here’s how to work it out properly, with a worked example you can copy.

What do other businesses spend?

It’s useful to know the benchmarks, as long as you treat them as a starting point.

• Large companies: Gartner’s 2025 CMO Spend Survey of 402 marketing leaders in North America, the UK and Europe found budgets flat at 7.7% of company revenue for the second year running. Paid media took 30.6% of that budget.
• UK trend: The IPA’s Bellwether report for Q3 2026 found a net balance of +14.3% of UK companies revising their marketing budgets upwards, the highest since 2024, with growth across every category from PR and events to advertising.
• Small businesses: There’s no reliable official UK figure. The common advice is somewhere between 5 and 10% of turnover, with newer and faster-growing businesses at the top end and established businesses with lots of repeat custom at the bottom.

A percentage of turnover tells you what’s normal. It doesn’t tell you what will work for you. For that, you need your own numbers.

Work it out from your own numbers

You need three figures. If you don’t know them exactly, a sensible estimate is fine to begin with.

1. What a new customer is worth in profit. Not turnover: what you keep after the cost of doing the work. If customers come back, include a realistic amount of repeat work.
2. Your conversion rate. Out of every ten enquiries, how many become customers?
3. How many new customers you want each month.

Then:

The most you can afford per enquiry = profit per customer × conversion rate.

Your monthly budget for new customers = cost per enquiry × enquiries needed.

A worked example

A kitchen fitter makes about £2,000 profit on an average job. One in five enquiries turns into a job (a 20% conversion rate). They’d like four extra jobs a month.

• Break-even cost per enquiry: £2,000 × 20% = £400.
• To win four jobs they need about 20 enquiries.
• If they aim to pay no more than £100 per enquiry, leaving plenty of profit, that’s a budget of about £2,000 a month.

That’s a starting point. After three months the real numbers replace the guesses: maybe Google Ads bring enquiries at £60, and a Facebook campaign at £180. Money moves to what works.

How to split your budget

Think of your marketing money in four pots.

Pot	What it pays for	Rough share
The basics	Website, hosting, Google Business Profile, email platform, tracking	Whatever it takes to get these right first
Building your name	Content, SEO, social media, PR, sponsorship, brand consistency	About half of what’s left
Sales now	Google Ads, paid social, offers, retargeting	About half of what’s left, less the test pot
Testing	A new channel or idea each quarter	10% or so

Why split between “building your name” and “sales now”? Because most of your future customers aren’t ready to buy today. Les Binet and Peter Field’s research for the IPA found that, for many businesses, roughly 60% brand-building and 40% sales activation gives the best long-term results, though the right balance varies by sector and size. Research by John Dawes for the LinkedIn B2B Institute suggests only around 5% of business buyers are in the market at any one time. Spend everything on chasing that 5% and you’ll be starting from scratch every month.

Time is a budget too

If cash is tight, your time is your marketing budget. Plenty of the most effective small business marketing costs nothing but hours: your Google Business Profile, asking for reviews, answering customer questions on your website, and a monthly email. Our 25 marketing ideas for small businesses are sorted by how much time and money they need, and our free marketing ideas tool will pick some for you.

Be honest about the cost of doing it yourself, though. If an hour of your time is worth £60 and marketing eats ten hours a month, that’s £600 you could spend on help.

When to spend more, and when to spend less

Spend more when:

• a channel is bringing in customers below your target cost and you haven’t hit its limit yet;
• you’re launching something new, opening in a new area or entering a busy season;
• competitors are spending more and taking your share of searches and recommendations.

Spend less, or pause, when:

• you can’t track where enquiries come from (fix that first);
• you can’t cope with the work you’ve already got;
• a channel has missed its target for six to eight weeks despite changes.

How to tell if your budget is working

Review every 90 days. The numbers that matter:

• Cost per enquiry by channel.
• Cost per new customer (cost per enquiry ÷ conversion rate).
• Return on marketing spend: profit from new customers ÷ marketing cost.
• Searches for your name, which grow when your brand-building is working.
• Enquiries from AI assistants and Google’s AI answers, tracked in GA4.

If you can’t see these yet, the first thing to spend on is tracking: Google Analytics 4 with key events for calls and forms, and call tracking if the phone is your main channel.

Your questions, answered

Ready for some help?

Want a second opinion on your budget, or help working out your real cost per customer? Book a free chat and we’ll go through your numbers with you. To build your whole plan step by step, work through our free marketing guides, from branding to budgeting.