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Free calculator
Marketing Budget Calculator: How Much Should You Spend on Marketing?
Enter your revenue and your stage. Get a real monthly marketing budget and the split between paid and owned channels that fits where your business is right now.
The U.S. Small Business Administration suggests 7 to 8% of gross revenue for businesses under $5 million with margins around 10 to 12%. New businesses or those entering a new market usually need more, and businesses with strong referral flow can spend less. Evolution Media Group recommends a floor of $1,500 a month, with more of the budget shifting from paid to owned channels as a business matures.
Paid $1,467 a month: ads and other channels that stop when you stop paying. Owned $2,200 a month: website, Google profile, SEO, and content that keep working.
Most of your budget should now build owned channels. Keep paid campaigns in the towns and services your owned channels have not reached yet.
Baseline from U.S. Small Business Administration guidance: 7 to 8% of revenue for businesses under $5 million, assuming 10 to 12% margins. Stage adjustments, the $1,500 floor, and splits are Evolution Media Group recommendations based on client work.
How it works
How does the calculator find your number?
- Start at 7.5% of revenueThe middle of the SBA's 7 to 8% guideline for businesses under $5 million.
- Adjust for your stageAdd 3 points if you are new or entering a new market. Subtract 2 points if referrals already carry part of your growth.
- Apply a floorNever less than $1,500 a month, the realistic minimum to fund a site that ranks, an active Google profile, and steady content.
- Split by stageStartup 60% paid and 40% owned. Growth 40/60. Established 20/80. Owned channels get cheaper per lead as they compound.
Paid vs owned
What is the difference between paid and owned marketing?
Paid channels produce leads as long as you pay: ads, Local Services Ads, bought leads, and sponsored listings. They are fast and predictable, and they never get cheaper.
Owned channels keep working after you pay: your website, Google Business Profile, reviews, SEO content, social media, YouTube, and your email list. They take months to build, then produce leads at a falling cost. That is why the split shifts toward owned as you grow.
A real example
A new insurance agency launched under a strict non-compete and could not contact a single past client. It built its owned system on about $2,500 a month and grew to $40,000 a month in residuals.
See our case studiesFree download
Get the Marketing Budget Framework
The full two-page framework with fill-in worksheets for each step, a worked example, what counts as paid and owned, and the mistakes that waste a budget.
- Five steps to your real number
- Monthly split worksheet for your stage
- A worked example from a two-year-old roofing company
You will also get Your Next Marketing Move, our free weekly tip. Unsubscribe anytime.
Questions
Marketing budget questions
What percentage of revenue should a small business spend on marketing?
The SBA guideline is 7 to 8% of gross revenue for businesses under $5 million with margins around 10 to 12%. Adjust up if you are new or entering a new market, and down if strong referrals already bring in a large share of your customers.
What is the minimum monthly marketing budget?
We recommend at least $1,500 a month. Below that, it is hard to fund a website built to rank, an active Google profile, and consistent content at the same time.
How should I split my budget between ads and everything else?
New businesses lean on paid channels while owned ones are built, often about 60% paid. Growing businesses shift to about 40% paid, and established businesses to about 20% paid, as their website, reviews, and content produce more leads.
Should my marketing budget include ad spend?
Yes. Ad spend paid to Google or Meta is part of your paid budget. Management fees for ads count there too.
How do I know if my budget is working?
Track cost per booked job by channel every month. Move money toward channels getting cheaper and away from the ones that stay flat or rise. Our True Cost Per Lead Calculator does this math for each source.
Want help putting your budget to work?
Book a free 30-minute call. We will review your numbers and show you where each dollar should go first.