How much to Budget for Marketing as a Small Business

I had a lady come up to me recently, SO excited to meet me and ask me questions about how to market her business. She said she felt like she immediately connected with me, and that she wanted to stay connected with me for when she's ready to hire someone to be the creative director of her hair salon's marketing strategies.

And then she said it -- "I would love to work with you, but I don't have the budget for it right now."

On the inside, I died a bit, because I never want to lose an opportunity to work with someone so bought-in to my brand. My mind started drifting... "If I'm 'out-of-budget,' I wonder what IS the budget? And is there something I could offer in my services that would help small business owners who think the same thing?"

If you're a small business owner and you aren’t sure what you should be putting into your Marketing Fund, here is my answer: 1%.

I'm not just making this up. At my previous job, where it felt like we put everything together with duct tape, we waited TEN YEARS before spending a dime on marketing. Everything had been word-of-mouth, and by using old-school marketing tactics (and by the grace of God!), we were able to remain open and keep operating costs L.O.W. Could we have grown a little faster if we had used 1% of our sales for marketing purposes? We'll never know, but I do know that in this age, a little really does go a looooong way.

What Does This Mean for Your Small Business?

For every $100 you make, save $1 toward your Marketing Fund. At the end of the year, when you can see how much you've brought in, multiply that number by 0.01.

For example:

• $25,000 in income = $250 in marketing expenses

• $50,000 in income = $500

• $100,000 in income = $1,000

We broke $500k in income one year (keep in mind we'd been in business for 10+ years), so we budgeted $5,000 in marketing expenses the following year.

If even $250 feels like a stretch, that’s okay. What’s important is building the habit of setting something aside. Starting small, staying consistent, and being strategic with how you use your budget can still create meaningful growth.

Worth It vs. Skip: My Marketing Expense Breakdown

As a business owner, I know you've got your eyes on every single penny. To spend even $10 on something has to have an ROI that's worth your time. Here are some marketing expenses I found to be worth the investment, and some things I would skip:

• Skip - Business Cards: Digital contact-sharing tools or QR codes can serve the same purpose while being more cost-effective and sustainable.

• Worth It - Online Reputation Management: Your reviews are often the first impression of your business. Responding to reviews and encouraging satisfied customers to leave feedback can drive trust and new business. And trust me, if they're not finding you on social media, they ARE finding you on Google!

• Skip - Traditional Print Advertising: We tried this a few times, and the most effective print ads had a coupon attached to them, which had to physically be brought into our shop for redemption. We pretty much broke even on the investment.

• Worth It - Email Marketing: Your email list is gold. These are the customers most invested in your business, and you have a direct line of contact with them.

• Skip - Radio Ads: Hard to track ROI and rarely results in tangible leads unless paired with a memorable code or discount.

• Worth It - Professional Website Design: Nothing takes trust away quicker than not being able to find your business’ corner of the internet—or finding it outdated and unprofessional.

• Skip - Branded Swag: No one really wants a pen with your business' name on it but you.

Budget-Friendly Small Business Marketing Wins

If you’re working with a limited budget, here are a few creative ideas you can try:

• Collaborate with local businesses for joint promotions.

• Host a simple social media contest or giveaway to boost engagement and visibility.

• Use free tools like Canva for creating professional-quality graphics.

• Start a customer referral program with small but meaningful rewards.

Marketing doesn’t have to feel overwhelming or out of reach. By setting aside just 1% of your income for your marketing budget, you’re giving your small business a chance to grow, connect with customers, and build trust in a competitive market. Start small, focus on what works, and trust that even modest investments can bring your business closer to its goals.

And if you need a helping hand, let's chat! I'd love to hear your online business goals for 2025!