Your marketing budget is an output of your own numbers, not a percentage plucked from the air. Work it backwards: what an average customer is worth to you over the time they stay, how many enquiries turn into customers, and therefore the most you can afford to pay for one enquiry. Multiply that by the number of customers you want next month and you have a figure you can defend. Then run two checks — can you do the work, and can you wait for the money.
At a glance
| Feature | Detail |
|---|---|
| Where the number comes from | Your own figures: what a customer is worth, how many enquiries convert, how many customers you want |
| The rule of thumb to ignore | "Spend 5 to 10% of sales" — an average of businesses nothing like yours |
| The number that sets the ceiling | The most you can afford to pay for one enquiry |
| Check one | Could you do the work if it all landed at once |
| Check two | Could you cover the gap between paying for ads and being paid |
| What counts as spend | Ads, website, photos, listings, signage — and your own time |
The percentage rules of thumb, and why they do not help you
"Spend 5 to 10% of sales on marketing" is the advice everyone meets first. It is an average taken across thousands of businesses that are nothing like yours, and for a one-person business it falls down in three places.
It never tells you whether the money came back. A percentage is a spending rule, not a test. Two plumbers can both spend 8% of sales while one is buying enquiries at £15 and the other at £90.
It gives you the least when you need the most. In month one your sales are near zero, so 5% of them is near zero — at exactly the point you have no customers.
It ignores the limit that actually binds you: hours. Winning customers is one of the four ways to grow a business, and for a one-person business the cap is the work you can do, not a share of sales. If a customer is worth £320 and you can win one for £50, the sensible budget is "as many as I can get through properly", not a percentage.
Step 1 — what an average customer is worth to you
Take Jamie, who runs a 24/7 plumbing business on his own in Reading. He charges £70 an hour and bills around 25 chargeable hours a week. An average job comes to about £200, and the parts and fuel on that job cost him about £40 — so £160 is left over to pay his bills and pay him.
Not everyone calls back, but enough do. Looking through a year of jobs, an average new customer gives Jamie two jobs over the time they stay with him. So a new customer is worth about £320 — and that is £320 left over after the parts and fuel, not £320 of sales.
Step 2 — how many enquiries become customers
An enquiry is not a customer, and mixing the two up is how budgets go wrong. Jamie counts last month: 10 enquiries — calls, messages and website forms — of which 4 turned into paid jobs. Those four are worth about £1,280 between them. Spread across all ten enquiries, each enquiry is worth about £128 to him.
If you have no history yet, guess low, write the guess down, and correct it after a month of real numbers. Where those enquiries come from is a subject of its own — see our guide to lead generation.
Step 3 — the most you can afford to pay for an enquiry
£128 is what an enquiry is worth, not what you can pay for it. What is left after the marketing still has to cover the van, the insurance, the tax and you.
So Jamie decides he is willing to spend a quarter of a new customer's value on winning them: £80 per customer. Four customers come from ten enquiries, so that is £320 across ten enquiries — a ceiling of £32 an enquiry. Above that, growing costs him money.
The quarter is a choice, not a law: a business with money in the bank can go higher, a tight one lower. And if winning a customer costs more than they are worth however you cut it, the problem is the price or the margin, not the ads — our pricing guide covers fixing that.
Step 4 — how many customers do you want next month
Now put the ambition into numbers. Jamie wants eight new customers a month. At four customers per ten enquiries, that means he needs 20 enquiries a month.
Step 5 — your monthly budget
Twenty enquiries at his ceiling of £32 is £640 a month. That is the most Jamie can spend and still grow profitably — a ceiling, not a target. If ads in his area deliver enquiries at £20, those twenty cost him £400 and he keeps the difference. If they come in at £45, he should stop rather than push harder.
Play it back. £400 a month of ads brings 20 enquiries, which bring 8 new customers, which leave about £1,280 after parts and fuel on their first jobs alone. What an enquiry actually costs varies enormously by trade and area, which is why you work out your ceiling first and choose the channel second.
Working the ceiling out takes about ten minutes with last month's figures, and it makes every later decision easy. See what you can afford to spend on marketing. Plan works out a marketing budget from your own numbers, so you know what a customer is worth before you pay to win one.
Check one — could you do the work if it all landed
A budget that works on paper can still break the business. Eight new jobs a month is about 20 more chargeable hours for Jamie, on top of the 25 hours a week he already bills, so he has room for it.
Ask for 30 a month and the ads would work perfectly while the business fell over: late jobs, bad reviews, and money spent winning customers he then lets down. Set the budget to the work you can do well, and raise it once you have freed up time or taken someone on.
Check two — could you cover the wait
Ads are paid for as they run, usually weekly, on a card. The customers they bring pay you when the job is done — and if you invoice businesses, letting agents or landlords, often 30 days after that. So there is a stretch where money is going out and none has come back.
Work out the worst case before you start: a month of ad spend plus the materials for the jobs it brings, all paid before the first customer pays you. For Jamie that is £400 of ads plus parts — money that needs to be in the account already, not money he hopes the ads will produce. If it is not there, start smaller.
What actually belongs in the budget
Ads are the obvious part and often not the biggest. A complete monthly figure includes ad spend, the website and its hosting, decent photographs of your work, paid listings or directory fees, van or shop signage spread across the year, and any software you pay for to send emails or take bookings.
The thing people leave out is their own time: an hour a day answering messages and posting is a real cost even though no money moves. And some of the best work costs nothing but discipline — your Google Business Profile and asking customers for reviews. Our guide to marketing a small business covers those and which channels suit which trade.
Figures correct as of September 2026. Tax thresholds, fees and rates change; check the linked GOV.UK pages before acting. Prices and costs shown are indicative and vary by area and by what's included.
What is Plan?
Plan is a free business operating system for people starting or newly running a UK business. It walks you, one simple step at a time, from your elevator pitch through brand, product and pricing, to a complete business plan — then uses everything it now knows about the business to help with the basics: logo and brand, marketing, a website, a bank account, funding, insurance, company registration. You can use as much or as little as you want.
Frequently asked questions
What is a good marketing budget for a small business? The one your numbers support. Work out what an average customer is worth after costs, how many enquiries it takes to win one, and the most you will pay per customer. That gives a cost per enquiry you can afford, and your budget is that figure times the enquiries you need.
Is 5 to 10% of sales a good marketing budget? It is a starting point at best. The percentage says nothing about whether each pound spent came back, and it gives you almost nothing in your first months, when you have no sales and no customers. Work backwards from what a customer is worth instead.
How do I work out what a customer is worth? Take an average sale, take off what that sale cost you to deliver, then multiply by how many times an average customer buys before they stop. An evening with a year of invoices gets you close enough. Use what is left after costs, never the sales figure.
What if I have no customers yet, so no numbers? Estimate conservatively and write the estimate down: your planned price, your costs per job, and a low guess at how many enquiries convert. Set a small budget you could afford to lose, run it for a month, then replace every guess with what actually happened.
Should I count my own time as marketing spend? Yes, at least roughly. An hour a day writing posts and answering messages is an hour not earning, and businesses that ignore it conclude that free channels are free. Put a rough hourly value on your time so you can compare doing it yourself with paying someone.
Two ways to do this
Work out the number yourself, free. Plan takes your prices, costs and customer numbers and shows what a customer is worth and what you can afford to spend winning one — one short question at a time, in your browser. Do just this bit and stop there.
Or hand the marketing over. Want help getting customers? Our sister agency The Fractions runs ads and builds websites for small UK businesses — the pages, the ads and the enquiries behind them.