How much should a small business spend on marketing?

Most small businesses should spend somewhere between 3% and 10% of revenue on marketing, and the SBA's rule of thumb is 7–8% for companies under $5 million that run healthy margins. In Redding, the percentage matters less than the timing and the split: build your foundations in the slow months, spend on ads ahead of your busy season, and keep a reserve for fire season.

The budget conversation that happens in November

It's the week after the clocks fall back. The summer rush is a memory, the books for the year are mostly written, and you're sitting at the kitchen table trying to decide what to set aside for marketing next year. Last year's number was "whatever was left in March," and you have a feeling that isn't a strategy.

You're not alone. Most owners we talk to in Shasta County don't have a marketing budget so much as a marketing mood. Good month, say yes to the radio rep. Slow month, cancel everything.

There's a better way, and it borrows from the biggest thing on our map. Shasta Dam doesn't release the same amount of water every month. The operators hold water when it's plentiful, release it when the valley downstream needs it, and always keep a reserve for a dry year. Your marketing budget should run the same way. (You've seen the bathtub ring on the lake in October. Nobody panics. It was planned.)

We're a marketing studio based in Redding, so yes, we have a stake in how you answer this. We'll keep it useful either way. If you're also deciding who should spend the money, our guide to choosing a marketing agency in Redding covers that half of the question.

What does the "percent of revenue" rule actually say?

The number you've probably heard comes from the Small Business Administration. Its marketing plan worksheet says that marketing budgets "can vary widely, from 2 percent of sales to 20 percent," and that as a general rule, businesses under $5 million in revenue should put 7–8% of revenue toward marketing (SBA Ascent marketing plan tool).

Two details in that same paragraph get dropped every time someone repeats the rule:

• It assumes margins of 10–12% after your other expenses, marketing included. If your margins are thinner, 7–8% may be more than the business can carry.
• It splits the money in two: brand development (your website, sales materials and the channels that show who you are) and promotion (campaigns, advertising, events).

For a sense of what larger companies spend, the Spring 2026 CMO Survey, sponsored by Duke's Fuqua School of Business, Deloitte and the American Marketing Association, found marketing budgets at 9.0% of company revenue, their lowest share in several years (The CMO Survey, Spring 2026). Gartner's 2025 CMO Spend Survey put the figure at 7.7% (Campaign Asia).

So the national answer clusters around 7–10%. That's a fine place to start the conversation. It's a poor place to end it, because a percentage tells you how much water is in the reservoir and nothing about when to open the gates.

Why the national number doesn't fit Redding as-is

The percentage rule was written for an average business in an average market. The North State isn't average in at least four ways.

Our year has real seasons. Summer brings lake traffic to Lake Shasta and Whiskeytown, heat that keeps HVAC crews booked, and wedding weekends. Winter slows a lot of businesses down. A budget spread evenly across twelve months spends too much in the months nobody is buying and too little in the weeks they're deciding.

Fire season can rewrite a month. Anyone who was here in 2018 for the Carr Fire knows a smoke-filled week can change what people need, what they're in the mood to hear, and whether they're home at all. A budget with no slack has nowhere to go when that happens.

Word of mouth does more of the work here. People ask their neighbors, their church and their local Facebook group before they ask Google. That's a gift, because referrals are cheap. It also means your marketing money's first job is often to confirm a referral (a clear website, a full Google profile, recent reviews) rather than to find strangers.

The owner is usually the marketing department. Most Redding businesses don't have a marketing manager. They have an owner who also runs the crew, answers the phone and does the books. Time is part of the budget, and it's the part that runs out first.

The Base, Bump and Buffer budget

Here's the framework we use with North State businesses. It keeps the percentage rule, then decides where the water goes and when.

1. Base: the always-on foundation. Your website, your Google Business Profile, a steady habit of asking for reviews, and basic tracking so you know where calls come from. This runs every month, quietly, like the minimum flow the river always gets. It's what makes every referral and every ad dollar work harder.
2. Bump: the seasonal push. Paid ads (Google Ads, Local Services Ads, Meta) and promotions timed to the four to eight weeks before your busy season, then held through the peak. This is the release when the valley is thirsty.
3. Buffer: the reserve. A slice you don't commit at the start of the year. It covers fire season pivots, a competitor's sudden push, a test of a new channel, or a good month you want to press on. If you never touch it, it rolls into next year's Base.

(Hold water, release on schedule, keep some back for the dry year.)

How to split it

These are our starting points, not survey data. Adjust them to your business, and treat them as the first draft of a conversation.

Notice the Buffer stays put. In this part of California, a reserve isn't a luxury.

What goes in each bucket?

Base, in order of priority:

• Google Business Profile and reviews. Mostly time, very little cash. For many local businesses it's the highest-return line in the whole budget. Our local SEO guide for Redding explains why.
• The website. A one-time build, plus hosting, care and edits. Spread a build cost across two or three years when you plan, the way you'd think about a truck. Our guide to what a website costs in Redding has honest ranges.
• Call and form tracking. Cheap, unglamorous, and the only way to know whether the Bump is working.
• Photos of your real people and real work. A once-a-year shoot beats stock photos for every channel you run.

Bump, matched to how your customers buy:

• Google search and Local Services Ads for people who need you now ("AC repair Redding" in July). See our take on running Google Ads yourself or hiring help.
• Meta ads for things people plan ahead or buy on impulse: a lake trip, a med spa membership, a wedding venue tour.
• Local sponsorships and events, if that's where your customers actually are. Measure them the same way: did the phone ring?

Buffer: keep it in the account, not in a plan. Decide in advance who's allowed to spend it and on what signal.

Run the numbers: a made-up Redding example

Picture a pool service and repair company in Redding doing $900,000 a year with healthy margins. (This company is made up. We'd rather not put a real neighbor's books on the internet.)

At 6% of revenue, the annual budget is $54,000. It fits the "highly seasonal" row, so:

• Base, 30% ($16,200): website care and a refresh of the service pages, review requests after every job, call tracking, a spring photo day.
• Bump, 55% ($29,700): Google search and Local Services Ads, starting in March (when people notice the pool is green) and running hard through August.
• Buffer, 15% ($8,100): held back. If a smoky August keeps people indoors, some of it shifts to a fall "close your pool right" offer. If it's untouched in December, it pays for next year's website work.

Now flip the math to check it. If an average new customer is worth about $1,500 in profit over their first year, $54,000 needs to bring in around 36 new customers to pay for itself. Spread across a season, that's a few a week. That's a reasonable target, and it gives the owner a number to judge every channel against. (If the answer had been 400 customers, the budget or the plan would need a second look.)

How do you set your own number?

1. Start with last year's revenue, or this year's target if you're planning a big push.
2. Pick a percentage that fits your margins. Thin margins, start nearer 3–5% and fix the leaks (no tracking, slow follow-up, a weak website) before adding spend. Healthy margins and a goal to grow, 7–10% is a sensible range, close to the SBA's rule.
3. Check it against a customer. Divide the budget by what a new customer is worth to you. If the number of customers you'd need sounds impossible, adjust the budget or the plan.
4. Split it Base, Bump and Buffer using the table above.
5. Put it on a calendar. Base every month. Bump in the weeks before your peak. Buffer on hold.
6. Review it every quarter, not every bad week. Marketing that gets cancelled in a slow month never gets a chance to fill the next busy one.

Where to start

If you set a budget once a year and then run it like Shasta Dam, steady at the base, generous ahead of demand and never fully drained, you'll be ahead of most of your competitors. Not because you spent more, but because you spent on purpose.

If you'd like a second set of eyes on your number, we're here in Redding. Book a 30-minute call with Alex, bring last year's revenue and your busy-season dates, and we'll sketch a Base, Bump and Buffer plan with you. It's yours to keep either way.