How much should a small business spend on marketing?

It's the question every business owner asks, and most advice answers with a number pulled from thin air. So here's the honest version: the amount matters far less than where it goes. A business can waste a big budget on the wrong things and spend a small one brilliantly. Let's cover the rough benchmarks, and more importantly, how to spend so it actually pays back.

The rough benchmark

A common rule of thumb is that established small businesses invest somewhere around 5–10% of revenue in marketing, and businesses actively trying to grow fast often push toward the higher end. But treat that as a loose guide, not gospel. Your right number depends on your margins, how much you rely on repeat customers, and how competitive your market is.

If you're just starting or on a tight budget, don't let that percentage paralyse you. Plenty of the highest-return work (a complete Google Business Profile, asking for reviews, fixing your website's basics) costs little or nothing but your time.

Why "where" beats "how much"

Here's the trap. Owners often spend on the flashy, visible stuff (running ads, boosting posts) while the boring foundations are broken underneath. That's like pouring water into a leaking bucket: the more you pour, the more you waste.

Never spend on getting more attention until you can convert the attention you already get. Ads to a website that doesn't convert is money set on fire.

So before you increase spend, ask which of the three growth stages is actually your weak link (get seen, earn trust, or become the obvious choice) and spend there first.

A sensible order to spend in

1. Fix the free foundations first. Complete your Google Business Profile, start collecting reviews, make sure your website loads fast and makes it obvious how to contact you. Cost: near zero. Return: often the biggest of anything on this list.
2. Then fix conversion. If people find you but don't get in touch, a small investment in your website's clarity, trust and calls-to-action pays back faster than any ad. (See why websites fail to convert.)
3. Then, and only then, buy attention. Once you can reliably turn visitors into customers, ads and local SEO become an investment rather than a gamble, because now every extra visitor has somewhere good to land.

The only number that really matters

Forget the percentage for a second. The metric that tells you whether your marketing is working is simple: what does it cost you to win a customer, and what is that customer worth? If you spend ₦20,000 to win a customer who spends ₦200,000 with you, you'd happily do that all day. If you spend ₦20,000 to win a ₦10,000 customer, no budget is "right."

Once you know those two numbers, the question stops being "how much should I spend?" and becomes "how much can I profitably spend?" That’s a much better problem to have.

Start where the return is

If money's tight, that's an argument for being more strategic, not for doing nothing. Spend your first efforts where the payback is highest and the cost is lowest (the free foundations), then reinvest what they earn into the next lever. That's how small budgets beat big ones.