How much should a small business spend on marketing UK? How to set your budget

Type how much should a small business spend on marketing UK into Google and most answers repeat one figure, 7 to 10% of revenue. It sounds precise, but we could not find a published UK survey of small firms behind it. The government’s own small business survey does not ask how much firms spend on marketing, and we found no other UK body that publishes it.

So the honest answer is that there is no reliable UK percentage to copy. The budget that works is the one you work back from your own numbers. That means the customers you need, what each one is worth and what it costs to win them. This guide shows you that method, what UK data can tell you, and how to grow the budget as results come in. If you want a second pair of eyes on the plan, our marketing strategy service starts from exactly these numbers.

How much should a small business spend on marketing?

The 7 to 10% rule is popular because it is easy. It gives you a number in one line of maths, and it scales as you grow. The trouble is that a share of revenue knows nothing about your business. A plumber with steady repeat work, a new skincare brand and a B2B consultancy can all turn over the same amount and need very different budgets.

Three things matter more than turnover. The first is margin, because a customer worth thousands in profit can justify a far higher cost per sale than one worth a few pounds. The second is your goal, since holding steady costs less than growing into a new area. The third is competition, as a crowded sector pushes up the price of every click and lead. None of these appear in a revenue percentage.

A revenue figure still has a use as a sense check. Once you have worked out a budget from your goals, compare it with your turnover. If the two are far apart, look again at your assumptions before you spend. Either way, the plan only holds up if every enquiry is tracked back to the channel that brought it, which is why marketing reporting and analytics should be set up before the budget grows.

What UK data does and does not tell you

UK data can tell you how small firms are doing and how much larger companies are spending, but not what small firms spend on marketing. That gap matters, because most small business marketing budget UK advice online fills it with figures from other markets or from much bigger companies.

The best UK picture of small firms comes from the Department for Business and Trade’s Longitudinal Small Business Survey 2025, which interviewed more than 8,000 SME employers. It shows how much pressure small businesses are under to win customers.

What the survey does not cover is spend. Its questionnaire asks whether a business sought finance for marketing, but not how much it puts into marketing each year. We could not find it in the Office for National Statistics releases either. When a guide quotes a UK percentage for small businesses, it is worth asking where the number came from.

Larger companies are measured closely, and their budgets are rising. The IPA’s Bellwether Report for Q3 2026 found that 25.6% of the companies it surveys raised their marketing budgets in the quarter, while 11.3% cut them, the strongest growth since 2024. The Advertising Association and WARC forecast that UK advertising will reach £50.5bn in 2026, with search the largest single channel.

Those figures will not set your budget, but they explain why clicks and leads cost what they do. You are bidding for attention against companies whose budgets are growing. Our look at the digital marketing trends for 2026 covers where that money is going.

How to set your small business marketing budget

The method below turns the question into a number you can defend to a business partner or your bank. It works for a local service, an online shop or a B2B firm, and it gives you a target cost per customer before you spend anything.

Here is how that works with round numbers. These are an illustration for you to swap your own figures into, not a benchmark or a quote. Say you need four new customers a month, one enquiry in four becomes a customer, and your channels bring enquiries at £50 each. You need 16 enquiries, so the spend on channels comes to about £800 a month, or £200 for each new customer.

Now check it against what a customer is worth. If each one brings £1,000 in gross profit, four customers bring in £4,000 and the plan pays for itself. If each brings £150, the same budget loses money, and the answer is to raise your prices, your conversion rate or the value of each sale before you spend more. For paid search in particular, our guide on how much to spend on Google Ads works the same sum through with click prices.

The fixed costs are easy to forget. A website that turns visitors into enquiries, conversion tracking, design work and software all cost money before a single ad runs, and so does the time you or your team spend on marketing each week. HMRC’s guidance on allowable expenses lists advertising and marketing, including website costs, as business costs, so check with your accountant how to record them.

How should you split a marketing budget between channels?

Split it by the stage your business is at. Early on, spend most on the foundations and on channels that catch people already searching for what you sell. Add channels that reach people earlier, such as paid social and content, once the first ones bring steady enquiries at a cost you can afford.

The order matters more than the exact shares. People searching for “accountant near me” or “emergency electrician” already want what you sell, so local search and search ads tend to pay back first. Reaching people before they search costs more per sale at the start but grows the number who look for you later. That is the job paid social advertising and content do well.

Research for larger brands points the same way. Les Binet and Peter Field’s study for the IPA, The Long and the Short of It, found the strongest results came from a mix of brand building and short-term sales activity, roughly 60 to 40. It was drawn from large brands’ award entries, so treat it as direction rather than a rule for a five-person firm.

Whatever split you choose, keep your own data in charge. A channel that brings enquiries at a cost you can afford earns more of the budget; one that does not after a fair test gives some of its share back.

How much should a startup spend on marketing in its first year?

A startup should spend enough to build the foundations and run small, measured tests, and no more. In the first year, that means a website that turns visitors into enquiries, tracking that shows where they came from, and one or two channels tested with a fixed budget and an end date.

The foundations come first because every later pound depends on them. A website built to win enquiries makes every visitor you pay for more likely to get in touch. Tracking tells you which channel deserves the next pound. For a local business, a complete Google Business Profile is free and often brings the first calls.

Keep cash back, too. New businesses rarely know their real cost per customer until they have run a few months of tests, and pulling the budget halfway through a test wastes what you have already spent. A smaller budget held steady for long enough teaches you more than a large one spent in a rush.

How to grow spend as results come in

The safest way to grow a small business marketing budget is in stages, each one paid for by the results of the last. Spend on what you have proved, test one new thing at a time, and decide on tracked enquiries rather than clicks or likes.

The timings are a guide rather than a rule. Google says its automated bidding can need around 50 conversions to settle, so a small account may take longer to give a clear answer. Each step also makes the next one cheaper. A page that turns more visitors into enquiries lowers your cost per lead in every channel, which is why conversion rate optimisation often brings more return than a bigger media budget. Once enquiries arrive, prompt follow-up by email and phone turns more of them into customers.

Is £500 a month enough for small business marketing?

£500 a month can work for a local business that focuses it on one channel at a time, in a sector where leads are cheap. It is rarely enough to compete across the UK in a crowded sector, or to run search, social and content at once.

If £500 is your limit, narrow everything. Pick one service, your best area and one channel, and give it long enough to show a result. A small, focused test tells you more than the same money spread across four channels, and it gives you a real cost per enquiry to plan the next step from.

Should you set the budget yourself or get help?

You can set the budget yourself if you know three numbers, which are the customers you need, what each is worth and how many enquiries become sales. Get help when those numbers are missing, when spend has grown without clear results, or when you need someone to run the channels as well as plan them.

Most small businesses can work through the steps above in an afternoon with their sales records to hand. The harder part is the discipline afterwards, which means tracking every enquiry, holding a test long enough and moving money on the evidence. If you would rather build the plan with us, our marketing strategy team can map the budget, the channels and the order to add them in, starting from your sales target.

Written by

Flynn Forster Co-Founder at Vulkan Creative LinkedIn profile of Flynn Forster (opens in a new tab)

I’m Flynn, Co-Founder of Vulkan Creative, a London-based agency helping businesses turn creative sparks into brands and campaigns that drive measurable growth. My journey started at Node4, one of the UK’s leading managed service providers, where I learned how to build demand properly, using inbound strategy, automation, and brand advocacy to turn technical expertise into consistent pipeline. I then moved to FlexiOffices as Content Marketing Lead, focusing on brand awareness and lead generation in a fast-moving commercial property market, sharpening my ability to create content that converts, not just content that gets clicks. After that, I joined Alphix Solutions as Product Marketing Executive, working on a cookie-free, AI-powered marketing intelligence platform for B2B teams, developing go-to-market messaging and product marketing strategies built around real-time performance insight. Today, I bring that mix of demand generation, content, and product positioning into Vulkan Creative. We deliver strategy, content, paid social, and conversion-focused websites entirely in-house, with no contractors, so clients get speed, consistency, and accountability.

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