A transparent starting point based on revenue, ambition and sector, with the reasoning shown rather than hidden.
Most established small businesses spend 5% to 10% of revenue on marketing. Holding steady sits at the lower end; growing meaningfully usually needs 10% or more; and businesses under two years old typically need to spend several points above their long-term rate because they are building awareness from nothing.
Sector matters too. Ecommerce and consumer brands compete on paid media and usually spend more; professional services firms that grow through referral and reputation usually spend less. Treat any percentage as a starting hypothesis and let your actual cost per customer settle the argument. If acquisition is profitable and you have capacity to deliver, the right budget is more than you are spending now.
Four inputs, and the reasoning is shown in full below.
Here is exactly what the tool does with your numbers.
This is a transparent rule of thumb, not survey data. The formula is:
budget % = base rate for your goal + new business uplift + sector adjustment
| Input | Adjustment |
|---|---|
| Hold steady | 5% |
| Grow | 9% |
| Grow fast | 13% |
| Trading under 2 years | +3% |
| Professional services | −1% |
| B2B services & trades | 0% |
| Hospitality / retail | +1% |
| Ecommerce | +3% |
| Software & SaaS | +4% |
The split between demand and brand reflects a simple idea: some spend converts people who are already looking for you, and some builds the recognition that makes future conversion cheaper. Businesses pushing hard for growth need proportionally more of the second, even though it pays back more slowly.
Treat the output as a hypothesis. Once you can measure cost per customer reliably, that number should drive the budget instead of any percentage.
Most established small businesses spend between 5% and 10% of revenue. Holding position sits near the bottom of that range, active growth near the top, and aggressive growth often needs 12% to 15%.
Businesses trading for under two years usually need to spend several points more than their long-term rate, because they are building awareness from a standing start with no existing customer base to sell to again.
Set it from revenue, then sanity-check it against profit. Revenue reflects the size of the operation you are trying to feed, which is what determines how much marketing it needs.
Profit tells you whether you can afford it. If the recommended budget is larger than your net profit, you are choosing to fund growth from reserves or borrowing, which can be right, but should be a deliberate decision rather than an accident.
A practical starting split is 60% on demand capture and 40% on brand building. Demand capture reaches people already looking for what you sell, such as search advertising and local listings, and pays back quickly. Brand building makes future demand cheaper to convert but takes longer to show up.
The faster you are trying to grow, the more you need the brand half, because there is only so much existing demand to capture in any given month.
It is a reasonable way to start, but not a good way to keep deciding. Percentage rules are useful when you have no reliable data on what a customer costs to acquire.
Once you can measure cost per customer and lifetime value with confidence, the logic inverts: if acquisition is profitable and you have the capacity to deliver, you should spend more regardless of what percentage of revenue that represents.
Built by Veris Labs
These calculators are a small, public version of what we do. The Veris Labs suite covers marketing and delivery, and where nothing off the shelf fits, we build it around your business instead.
