How Much Should a Small Business Spend on Marketing?

The most common question after "what should we do?" is "how much should we spend?". There is no universal number, but there are useful rules of thumb that help Melbourne trade and service businesses set a realistic starting budget. The key is to tie the spend to your revenue, your margins, and how quickly you need leads, not to a number you read online.

The percentage-of-revenue rules

A common benchmark is 5% to 10% of revenue for established businesses that want to maintain their position, and 10% to 20% for businesses in growth mode or launching into a new area. For a Melbourne trade business turning over $800,000 a year, that means anywhere from $40,000 to $160,000 annually, or roughly $3,300 to $13,000 a month.

The catch is that those percentages assume you already have a website, some reviews, and a way to track leads. If you are starting from scratch, you may need to front-load the budget to build the foundation — a lead-generating website, a complete Google Business Profile, and tracking systems — before you pour money into ads. For ongoing help with your local search presence, explore our Local SEO Melbourne packages.

What is realistic for a Melbourne trade or service business

Generic industry budgets vary by scope; they are not PG Media’s package prices. PG Media websites start from $3,000 + GST one-off, content creation from $1,400/month + GST and Local SEO from $800/month + GST. Meta ads packages are tailored, with ad spend paid directly to Meta on top. Flexible terms require 30 days’ notice; the lowest recurring starting prices apply to a 12-month partnership.

Ad spend is separate from management fees. A workable starting ad spend for Meta ads in Melbourne is usually $30 to $80 a day. Below $20 a day, the algorithm cannot gather enough data to optimise, so your cost per lead stays high and the campaign never gets out of learning mode.

How to split the budget across channels

• Website and SEO: 20% to 30%. This is your owned asset. A fast, conversion-focused site with suburb pages keeps paying off long after the work is done.
• Google Business Profile and local SEO: 10% to 15%. Mostly time and a small tool budget, but the return on a complete profile is enormous.
• Meta ads: 30% to 40%. This is your lead accelerator once the site and profile are working.
• Organic social and content: 15% to 20%. Builds trust and feeds ad creative without requiring a huge ad budget.
• Reviews, referrals and follow-up: 5% to 10%. A small budget for tools, gifts, or simple automation can multiply your conversion rate.

Scale spend as data proves what works

The biggest mistake is setting a budget and never reviewing it. Start with a fixed test budget for three months, then look at the numbers. How much did you spend? How many enquiries came in? What did each enquiry cost? How many turned into quoted work? If a channel is producing profitable leads, increase the budget. If it is not, fix the offer, creative, or targeting before spending more.

A good rule of thumb is to scale a channel only when you can reliably predict the return. If you know that every $1,000 in Meta ad spend produces four enquiries and one of those becomes a $12,000 job, scaling becomes a math decision, not a gamble.

The short version

Most small Melbourne service businesses should budget 5% to 10% of revenue for marketing, with a practical starting range of $2,000 to $5,000 a month plus ad spend. Split it across your website, local SEO, Meta ads, organic social, and reviews. Track cost per lead and scale what works. If you want a budget tailored to your trade and suburb, request a free strategy session or see our full range of marketing services in Melbourne.