What Does a Small Business Marketing Budget Look Like?

Jake Fisher

September 22, 2018

2 minute read


All start-up founders and small business owners face countless challenges each day: securing funding, staying afloat, growing at the right pace, building a solid team. Many of them might think that marketing is a luxury best left for large companies who can afford Super Bowl ads and a fancy advertising plan with a marketing agency.

Well, they’d be wrong: no matter how small the company, there should always be a marketing plan and budget, to increase awareness, customer base, and revenue.

Marketing Drives Revenue for Small Businesses

The main concept here - and this has been proven by experience and research - is that marketing drives revenue. A marketing budget for small businesses will earn itself back swiftly in increased sales and revenue, brand recognition and awareness. Internet advertising, in particular, boasts a particularly high ROI, keeping it well within a small business advertising budget.

"If you are marketing from a fairly static annual budget, you're viewing marketing as an expense. Good marketers realize that it is an investment." - Seth Godin  

However, this does not mean that you should just go and spend your hard-earned marketing budget with anyone who claims to be an expert on social media marketing. To make the most of your marketing budget you need to develop a good, solid marketing plan with the assistance of a reputable internet marketing agency. Once you have a plan, you can start developing project-oriented marketing campaigns, which have been proven to give the best results in terms of revenue increase. 

Small Business Marketing Budget Recommendation

The U.S. Small Business Administration recommends that the average small business invest 7 to 8% of gross revenue in marketing and advertising.  However, even 2-3% can go a long way when invested with an opportunistic strategy.

How to maximize your marketing budget

The key to keeping marketing spend low while getting the most bang for your buck is to prioritize how you spend your budget. There are only three fundamental ways to attract new clients or customers. They are, in order of priority:

  • Word-of-mouth referrals
  • Search Marketing
  • Advertising

Here is why you should prioritize the three in that order: 


 There is no manner of marketing more powerful than one person telling another person how wonderful your business is. Word of mouth referrals will always be the undisputed king of marketing methods. 

So, how do you maximize your referrals? The first part of the equation is that you need to delight your current customers. Focus on providing not only a great product, but also a great experience. Often, providing the kind of experience that means the difference between a satisfied customer and a delighted customers, doesn't cost anything extra. It just takes effort and focus on exceptional customer service. 

A delighted customer with friends the single most valuable marketing asset that your small business can possess. 


The second priority marketing channel for you to consider with your marketing budget is search marketing. Search marketing, when done right, has the advantage of connecting your business with consumers that are searching for your services or products at the time that are interested.  

Search marketing is usually broken down into two categories: search engine marketing (SEM) and search engine optimization (SEO). 

SEM is the practice of paying a search engine, such as Google, to display your website on the search engine results page when people search for targeted search terms that you specify. Most SEM platforms, such as Google Ads and Bing Ads, only charge you when someone clicks on your ad. 

SEM is quick acting. It can take just an hour or two to set up a Google Ads account and get started with search engine marketing. However, when you stop paying, you stop benefitting. 

SEO is the marketing discipline dedicated to increasing a website's visibility in organic search. Activities associated with SEO include keyword research, content development and link building. 

SEO takes much longer to see results, but the advantages are longer lasting. 

You should invest in both. Allocated as much money as necessary into SEM in order to drive the minimum desirable result today, and put the rest to SEO efforts, which will pay off 10x in the future. 


Advertising is the last marketing channel in the order of prioritization because it is usually the least efficient. You should consider advertising only after maximizing your efforts in word-of-mouth referrals and search. 


Jake Fisher

Jake Fisher, a co-founder of Bridges, is a multilingual B2B entrepreneur. In 2012, Jake co-founded Bridges Strategies with Ashley Quintana, a former coworker at Tyler Media. Within two years, the partners scaled Bridges to more than one million dollars in gross revenue from a $10,000 initial investment. Combining business knowledge and insight with the comedy from his radio days, Jake regularly speaks at events sanctioned by organizations such as the American Marketing Association, Public Relations Society of America, and HubSpot.


30 Greatest Lead Generation Strategies


Stay in the know