How much should a NZ business spend on marketing?
It's the question I'm asked most. The textbook answer is that most small and medium businesses spend 5 to 12% of revenue on marketing. That figure only becomes useful once you know why you're investing and what you expect to change.
How much do small businesses typically spend?
The benchmark is measured against revenue. At 5 to 12%, a business turning over $1 million a year would spend $50,000 to $120,000. Each band suits a different situation.
| Share of revenue | What it usually means |
|---|---|
| Under 5% | Very conservative. Common when a business is fully booked. The focus is basic visibility. |
| 5 to 8% | Established and steady. The aim is to keep demand and credibility where they are. |
| 8 to 12% | Measured growth. The sweet spot for growing without straining delivery or operations. |
| 12 to 18% | Aggressive growth. More common for newer businesses or those scaling quickly. |
Why the same percentage means different things
A business with high margins, little competition and strong referrals may only need to tidy up how it presents itself. In crowded markets such as professional services, ecommerce, hospitality and consumer brands, 8 to 10% can be what it takes just to stay visible, which is maintenance spend with no growth built in.
Copying a benchmark from an unrelated industry feels reassuring, and it rarely leads to better decisions.
A better way to think about your budget
Start with one question: what am I trying to change in the business, and why? Filling unused capacity, smoothing uneven demand, building a pipeline and testing a new market each need a different budget. Falling enquiries call for a different fix than strong demand with weak conversion.
Readiness matters more than people expect
Marketing tends to expose weaknesses that already exist: an immature sales process, pricing that doesn't match what customers expect, or limited capacity. Turning up the volume before those foundations are solid makes the problems louder.
Use marketing to learn as well as grow
Marketing is also a low-risk way to test before a big launch or investment. A modest paid social budget can show whether there's demand for a new offer, interest in a new market or appetite for a message, before you commit to larger production or PR spend.
Where most businesses go wrong
Budgets are often set before anyone has defined what marketing is for, using a rule of thumb or someone else's percentage. A percentage is a fine starting point. The trouble starts when the thinking stops there, because the same figure can be too much for one business and too little for another.
Two businesses can both say they need growth. One has unpredictable enquiries, the other has steady demand that brings in the wrong kind of work. Picking a number first and expecting activity to fix the problem is a bit like hiring before you know whether the gap is capacity, skills or focus. Once marketing's role is clear, the budget is far easier to set and feels proportionate.
Strategy sets the direction. Budget follows.
Common questions
Is the 5 to 12% rule relevant for B2B services?
Yes, as a sense check. Margins, competition, sales cycles and growth goals all shape the right level for a B2B service business.
Should marketing spend rise with revenue?
Not automatically. If the business can't handle more enquiries, marketing may be better used to maintain visibility, support retention or prepare for the next growth phase.
Should I stop marketing if my business is at capacity?
Usually not. Marketing can keep demand steady, protect pricing and improve the quality of enquiries. Pushing for growth before delivery is ready tends to create stress for your team.
Is it better to spend consistently or in bursts?
Consistent spend generally works better, because results build on each other and you learn as you go. Bursts suit tests and launches, and impatient on-off spending often gives misleading results.
How long before marketing has an impact?
Early signals, such as better conversations or sharper positioning, often appear within weeks. Meaningful commercial results usually take months, and stopping early can waste the momentum already built.
Want a second opinion on your budget?
Get in touch for a 30-minute chat. We'll work out what marketing should be responsible for, and what that's worth spending.