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How Much Should an SME Spend on Marketing? 2026 Benchmarks

Marketing · March 10, 2026 · Harper Quinn · 5 min

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A practical guide to marketing budgets for UK small and medium businesses: the percentage-of-revenue ranges by stage and sector, what shifts them, and how to set a budget you can defend.

"How much should we spend on marketing?" is one of the most common questions a small or medium business asks — and one of the hardest to answer in a single number. The honest reply is that it depends on your stage, sector, margins and ambition. But there are well-established ranges to anchor the decision, and a sensible method for turning them into a budget you can actually defend. Here is how to think about it for 2026.

The headline ranges

Marketing budgets are most often expressed as a percentage of revenue. Across UK SMEs, that figure commonly falls somewhere between the low single digits and the mid teens. As a broad guide:

Treat these as a starting frame, not a law. They describe where many businesses land, not where yours must. For a deeper breakdown by sector and stage, see our companion piece on small business marketing benchmarks.

A percentage of revenue is a sense-check, not a strategy. It tells you whether your number is roughly normal — it does not tell you whether it is right for your specific goals.

What moves the number up or down

Two businesses with identical revenue can rightly spend very different amounts. Four factors explain most of the variation.

1. Stage of growth

A new business has to build awareness from nothing, so it usually spends a higher share of revenue. An established business with a loyal customer base and word-of-mouth can often sustain demand on a lower share. Spending should track your ambition: standing still costs less than growing fast.

2. Sector: B2C vs B2B

Consumer businesses (B2C) typically spend a larger proportion, because they reach many individual buyers through paid channels and compete on visibility. Business-to-business (B2B) firms often spend less as a share of revenue, leaning on sales relationships, referrals and longer buying cycles. Neither is "better" — they are different economics.

3. Margins

High-margin businesses can afford to invest more in acquiring each customer; thin-margin businesses must be far more disciplined. This is why the cost of winning a customer has to be judged against what that customer is worth over time — the relationship we explain in CAC, LTV and payback.

4. Competition and goals

In a crowded, heavily-advertised market, simply being seen costs more. And a business chasing rapid expansion will rightly outspend one content to hold its position. Your competitive context and your targets both pull the number.

How to set the budget properly

The benchmark is where you check your number, not where you start. A better method works from the outside in.

1. Start with the objective. Decide what you want — say, a specific number of new customers or a revenue target for the year.
2. Work backwards to cost. Estimate what it takes to achieve that: how many leads, at what cost, through which channels. This grounds the budget in goals, not guesswork.
3. Sense-check against the range. Compare the figure with the percentage-of-revenue benchmarks above. If it is wildly outside the norm, ask why — it may be justified, or it may signal a flawed assumption.
4. Adjust for reality. Factor in your margins, your cash position and how much risk you can carry.
5. Split brand and performance. Allocate between long-term brand-building and short-term performance, rather than pouring everything into immediate sales.

This objective-led approach matters most when you have no dedicated team and every pound counts; our guide to building a marketing strategy with no team covers how to prioritise.

Make it evidence-led over time

A budget set once and never reviewed is a guess that ages badly. The discipline that separates effective spenders from the rest is measurement: tracking the return on marketing spend so each year's budget is informed by last year's results. Our explainer on measuring marketing ROI sets out how. Once you can see what each pound returns, the annual budget conversation stops being a debate and becomes a decision.

External benchmarks are a useful reference point here, and several UK marketing consultancies publish them. CM Beyer, for example, has compiled 2026 marketing-spend benchmarks for UK SMEs broken down by sector and stage, which can help you place your own number in context before you commit.

Four budgeting mistakes to avoid

Even with a sensible figure, the way the money is handled can undo it. Four errors are especially common among smaller businesses.

1. Cutting marketing first in a downturn. It is the easiest line to slash, but demand you stop creating today is revenue you lose tomorrow. Trimming is sometimes necessary; reaching for zero rarely is.
2. Treating it all as short-term performance. Pouring the entire budget into adverts that sell now starves the brand-building that makes future selling cheaper. Healthy budgets fund both.
3. Spreading too thin. A modest budget split across eight channels achieves nothing on any of them. Concentration beats dilution, especially when money is tight.
4. Setting it once and forgetting it. A budget that never responds to results is a guess repeated annually. Review it as the evidence comes in.

Avoiding these is often worth more than finding the perfect percentage in the first place.

The bottom line

There is no single correct marketing budget for an SME — but there is a sensible range, typically somewhere between low single figures and the mid teens as a share of revenue, shaped by your stage, sector, margins and goals. Use the benchmarks to sense-check, set the budget from your objectives backwards, split it between brand and performance, and measure the return. Do that, and "how much should we spend?" becomes a question you can answer with evidence rather than a shrug.

Key takeaways

• Marketing budgets are commonly set as a percentage of revenue, typically in single to low-double digits.
• Growth-stage and consumer businesses usually spend a higher share than established or B2B ones.
• Benchmarks are a starting point, not a rule; goals, margins and competition all move the number.
• Set the budget from objectives backwards, then sense-check it against the benchmark range.
• Track return on spend so the budget becomes evidence-led rather than a guess each year.

Sources

• Chartered Institute of Marketing (CIM)
• Federation of Small Businesses (FSB)

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