Ask ten business owners how they set their marketing budget and most will admit, if they're honest, that they don't really — they spend what's left over, or whatever a sales call talked them into. Both approaches lead to the same place: either you starve marketing and stay invisible, or you pour money into channels you can't evaluate and quietly resent the bill. A realistic budget sits between those two failures, and arriving at one is more method than magic.
Start with a percentage of revenue
The simplest starting point is to size your budget as a share of turnover. It's not precise, but it grounds the number in what your business can actually afford.
| Business stage | Typical % of revenue |
|---|---|
| Established, protecting margin | 5–7% |
| Steady growth | 7–10% |
| Aggressive growth / new launch | 10–20% |
For a business turning over £300,000 aiming for steady growth, that's roughly £21,000–£30,000 a year, or £1,750–£2,500 a month. That figure won't be exactly right, but it stops you plucking a number from thin air and gives you something to refine.
Separate the three things you're paying for
A marketing budget that lumps everything into one number quickly becomes a mystery. Break it into three distinct buckets so you always know what's funding what.
1. Media spend
The money that actually reaches platforms — Google Ads, Meta, LinkedIn. This is variable and scales with how aggressively you advertise. Crucially, it's separate from any fee you pay an agency to manage it.
2. People and management
Whether that's an in-house marketer, freelancers, or a digital marketing agency retainer. This is the cost of someone actually doing and steering the work. A common mistake is forgetting that managing ads costs money on top of the ads themselves.
3. Assets and infrastructure
The one-off and ongoing costs of things campaigns rely on — your website, branding, photography, email software, hosting. A campaign driving traffic to a weak site wastes the media spend, so this bucket protects the others. If your site is the weak point, budgeting for a web design refresh often returns more than extra ad spend would.
Budget by goal, not by habit
Once you have a total and three buckets, allocate based on what you're trying to achieve this year — not on what you spent last year out of inertia.
- Need leads fast? Weight toward paid ads, which deliver quickly but stop the moment you stop paying.
- Building long-term visibility? Weight toward SEO and content, which take months but compound. An SEO agency is a slower-burn line item that reduces your reliance on paid traffic over time.
- Driving repeat business? Weight toward email and retention, which are cheap relative to their return.
Most balanced budgets split something like 40% acquisition (ads, SEO), 30% assets and content, 20% retention, 10% testing new ideas — but adjust to your situation.
Ring-fence a testing budget
Reserve roughly 10% for experiments — a new channel, a new audience, a different offer. Without it, you'll keep doing what you've always done and never discover the channel that could outperform everything. Treat this money as tuition: some of it buys lessons rather than sales, and that's the point.
Review monthly, reallocate ruthlessly
A budget set once in January and never revisited is just a guess that's slowly going stale. Each month, look at what each channel cost and what it returned, then move money toward what's working and away from what isn't. The businesses that get the most from a modest budget aren't the ones who picked perfectly at the start — they're the ones who adjusted fastest.
To do that you only need one number per channel: cost per customer acquired. If email costs £8 to win a customer and Meta costs £90, the reallocation decision makes itself.
The number you can defend
A good marketing budget isn't the biggest you can afford or the smallest you can get away with — it's the one you can explain. You should be able to say, for every line, what it's for and what you expect back. That clarity is what separates marketing as an investment from marketing as a hopeful expense.
If part of your budget is heading toward outside help, compare vetted UK agencies by service and price in our directory, where verified reviews help you judge whether a quote represents fair value before you commit.