How much should small business marketing actually cost?

Every small business owner asks this question and almost nobody gives them a straight answer.

The advice you find online is usually some version of "spend 5 to 10 percent of revenue on marketing." For a roofer doing a million and a half a year, that's $75,000 to $150,000 a year on marketing. For most small businesses, that number is laughable. Nobody has that lying around, and even if they did, they wouldn't know where to put it.

So the percentage rule is really a way of dodging the real question.

The real question is simpler. What's the smallest amount you can spend on marketing that reliably brings in more of the right customers without you having to think about it every week?

That's the number worth working out. And the only way to get there is to look at what the actual options cost and what they actually do.

What an agency costs

A decent marketing agency for a small business runs somewhere between $3,000 and $10,000 a month. Some go higher. Most quote you a retainer plus a setup fee plus some kind of media spend on top.

What you get for that money varies wildly. A good agency runs your strategy, produces your content, manages your ads, and reports back on what's working. A bad one sends you a slide deck once a month and bills you for the calls in between.

The trouble for most small businesses is that you can't tell which one you've hired until six months in. By then you're $30,000 down and you're not sure if the leads you got would have come anyway. The other trouble is that the relationship only works if the agency genuinely understands your business, and most agencies are running 30 clients and don't have time to learn yours properly.

For some businesses, an agency is the right answer. For most small businesses, it's expensive and slow.

What a freelancer costs

A freelance marketer or content person costs roughly $1,000 to $3,000 a month, depending on what they do and how much.

The honest version of how this usually goes: you hire someone on Upwork or through a friend's recommendation. They post for you. The posts are fine. After three months you realize you can't really tell if anything has changed, and the freelancer doesn't have a clear answer either.

You either keep paying or stop paying. If you stop, the marketing stops with them.

A great freelancer is great. A mediocre one is expensive activity. The problem with the freelancer route is the same as with anything else where the result depends entirely on one person: when that person is good, you're winning, and when they're not, you don't always know.

What an in-house hire costs

A junior marketing person, fully loaded with salary plus taxes plus benefits, costs around $60,000 to $80,000 a year in most US markets. Mid-level is closer to $90,000 to $120,000. Plus the cost of whatever tools they use, plus the cost of you managing them.

For most small businesses, this is not a real option. The math doesn't work. A business doing two or three million in revenue a year cannot reasonably commit a senior salary to marketing unless marketing is the difference between scaling and not scaling, and even then it takes nerve.

Where this does work is at the larger end of small business, where the company has enough margin to absorb the salary and enough volume to keep the person busy. For everyone else, hiring in-house is a stretch that often ends with letting the person go six months later because the cost-to-output didn't pencil out.

What doing it yourself costs

The hidden option most small business owners default to without realizing they've made a choice. You do the marketing yourself, in the gaps between everything else.

The cash cost is close to zero. The actual cost is your time, your weekends, the strategy decisions you don't have the bandwidth to make, and the consistency you can't maintain because something more urgent always comes up.

For a year or two, this works. You post when you can. You run the occasional ad. You feel busy and you feel like you're doing something. Then you look back at the year and the business hasn't grown the way it should have, and you can't tell if it was because of the market, or your sales, or the marketing you didn't do.

The DIY cost is real. It just doesn't show up on a bill.

The actual question to ask

Once you lay these options out, the question changes. It isn't "how much should I spend on marketing." It's "how do I get marketing that runs reliably, gets better over time, and brings in customers without costing more than the customers are worth?"

Different businesses answer that differently. Some need an agency. Some have a great freelancer. A few are big enough to hire in-house. Most are stuck in the DIY trap and don't realize there's now a fourth option.

The fourth option is software that does most of what a junior marketer does, at a fraction of the cost, with the consistency of automation rather than the inconsistency of human availability.

It won't be right for every business. But for the ones it fits, the math is different from the math on any of the other options.

Worth understanding before you decide.

The cheapest marketing in the long run isn't the cheapest line item. It's the kind that brings in customers steadily, costs less per customer the longer it runs, and doesn't depend on you remembering to do it.

That's the number worth solving for, not a percentage of revenue someone wrote in a blog post in 2014.