With over a decade of experience helping small businesses grow online, I’ve seen one question come up time and time again:
“How much should my business spend on advertising & marketing?”
Running a business in Sydney today is no small feat. With so many businesses popping up every single day, it’s getting harder to compete by the day.
No matter what your business is, plumbing, locksmiths, home renovation, or even healthcare professionals, you’re doing an amazing job in helping the city move!
But despite your passion, the calls have slowed, the inquiries are drying up, and you’re starting to wonder, “Am I doing enough to be seen?” Thank goodness, you’re not alone. Many business owners wrestle with the same question.
Marketing can feel like a gamble; spend too little, and you stay invisible. Spend too much without a clear plan, and it’s like throwing money into the wind.
So, what’s the right number?
What the Numbers Say (and What They Don’t)?
Industry benchmarks give us a good place to start :
- The U.S Small Business Administration recommends that 7–10% of gross revenue is a standard guideline for most businesses
- 10% + is recommended if you want to grow steadily
- 20–30% might be necessary for newer businesses or start-ups trying to build awareness fast
- B2B businesses often spend closer to 5%, especially when relying on relationship-based sales
But here’s the thing: these are just averages, and your business isn’t average. It has its own story, its own goals, and its own rhythm, and your marketing budget should reflect that.
How to Decide What’s Right for You?
Before setting a dollar amount for your business spend on advertising & marketing, consider what’s happening under the hood of your business. Pause and reflect on where you are in your business journey.
Are you just starting out? If so, be prepared to invest more up front to get noticed. New businesses often need to build visibility from the ground up, which means creating brand awareness, generating leads, and gaining customer trust. All of this requires both time and budget.
If you’re already an established business, the focus shifts. Instead of casting a wide net, you might concentrate on consistency, refining your messaging for your target audience, strengthening your presence, and nurturing existing customers. The spend doesn’t always need to be higher, but it does need to be smarter.
4 Key Questions to Guide Your Budget
1- Next, consider how competitive your industry is. If you’re operating in a saturated space like plumbing or digital services, catching the attention of customers becomes a challenge.
You’ll either need to increase your marketing spend or be incredibly strategic with a smaller budget, finding creative ways to highlight your unique value.
2- Then ask yourself: What are you trying to achieve? Maintaining your current client base might only require a modest investment.
But if you’re aiming to grow, whether that’s expanding into new areas, reaching a new demographic, or launching a new product, your marketing budget should grow with you. Goals shape strategy, and strategy determines spend.
3- Now, think about the channels you plan to use. SEO, social media, Google Ads, and influencer partnerships each have their own costs and benefits.
Some may offer long-term value, while others bring quick results at a higher price. The key is to choose channels that align with your audience’s behaviour and your business goals.
4- Finally, how far do you want your reach to extend? Marketing your business in Sydney alone is very different from launching a national or international campaign.
As your geographical footprint grows, so do the costs and the systems needed to support it. Bigger ambitions require bigger (and often smarter) investments.
Stretching Your Marketing Dollars Further
It’s not just how much you spend, it’s how wisely you spend it. You need to follow some steps to monitor your spending and where it is going. Here’s a little sneak peek at how innovative businesses make every dollar count:
- Set Clear Goals: Don’t just “do marketing.” Know why you’re doing it: to drive traffic, generate leads, book calls, or build brand trust.
- Know Your Audience Inside Out: What do your customers care about? Where do they hang out online? What problems are they trying to solve? Market to that.
- Choose the Right Channels: You don’t have to be everywhere. Just be where your audience is and show up well.
- Track and Tweak: Test campaigns, measure results, double down on what works and ditch what doesn’t.
- Create Content That Matters: Good content builds authority, earns trust, and keeps you top of mind without constantly paying for clicks.
What Are Other Businesses Spending?
Let’s look at some averages to ground the theory:
- According to a BDC study, small businesses spent around $30,000 per year in 2019 on marketing in Canada.
- Businesses with 50+ employees spent upwards of $100,000+.
- Mailchimp suggests 2–5% of revenue is common, but again, that depends on your goals.
So yes, the range is wide. But rather than copying others, build a plan around your own growth path.
What Should Your Marketing Focus On?
Here are a few tips to help you align your budget with your business model:
If you’re a start-up, your priority must be visibility. Focus on building brand awareness through SEO, social proof (like reviews and testimonials), and awareness campaigns that get your name out there.
If you’re an established service business, say a local tradie or tow truck operator, invest in local SEO, Google Ads, and customer reviews. You want to show up exactly when someone searches for your service, at the moment they need it.
If you’re selling products online or in-store, make sure your e-commerce site is user-friendly and built to convert. Use retargeting ads to stay top-of-mind and focus on branding that builds trust and recognition over time.
The Bottom Line
When done right, marketing doesn’t remain just another expense. Instead, it becomes a revenue-generating machine for your business. Every dollar you put into a thoughtful, strategic marketing plan has the potential to bring you multiple dollars back.
But bear in mind that it takes clarity, commitment, and often, a little expert guidance from your favourite digital marketing agency.
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