The Tool Desk
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How much should a small business spend on marketing?
There is no single budget that fits every business. As Rieva Lesonsky, CEO and President of GrowBiz Media, put it while discussing how marketing budgets vary: “There’s no hard and fast answer to how much your business should spend.” U.S. Small Business Administration (SBA), July 9, 2019
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Instead of starting with a universal percentage or a promised return, decide what you can afford in both cash and staff time. Word-of-mouth, social media, and community volunteering can cost little in cash, but each requires consistent work. A tactic is only low-cost if the time it needs is realistic for your team.
Make it easy for nearby customers to find you
Keep business listings accurate
Check that your business listings show the correct name, address or service area, phone number, website, and opening hours. Outdated details can make it harder for customers to contact or visit you. The SBA’s older local-marketing guidance mentions Google and Bing listings; platform names, eligibility, and features can change, so check the current rules directly before setting up or editing a listing.
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Choose directories that fit your category
Look for local or industry directories that your customers actually consult, such as a relevant trade association or community directory. Prioritize a few credible, well-matched places over submitting your details everywhere. Check whether a listing is free or paid and whether you can keep its information current.
Encourage repeat visits and honest referrals
Follow up after a sale
A brief thank-you or follow-up can keep your business in customers’ minds and give them a simple way to ask a question or return. Choose a channel that suits the transaction—such as a note, a phone call, or an email—and make the message useful rather than sending reminders without a clear purpose.
Rank #2
Make referrals and feedback easy
Tell satisfied customers how to recommend you, and invite honest feedback without pressuring them to leave a particular rating. A simple referral prompt or business cards for local networking can help, but a digital message may cost less. The SBA cautions against offering something in exchange for a positive review; check the applicable platform’s current review policies before making requests or offers.
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Build local reach through relationships and events
Partner with complementary businesses
Find nearby businesses that serve a similar audience without directly competing with you. You might exchange referrals, display each other’s information, or create a joint offer that is genuinely useful to both customer groups. Agree in advance on what each business will do and how you will tell whether the arrangement produced inquiries.
Choose groups and events for audience fit
Relevant professional groups, community events, and sponsorships can put you in front of people who are likely to need what you offer. A small, focused event may be more useful than broad exposure if your customers are local and specific. Before committing, compare the fee, preparation and staffing time, expected audience, and a practical way to follow up with interested people.
Use social media for communication, not just promotion
Choose a channel your customers use
You do not need to be active on every social platform. Pick one or two channels that make sense for your customers and your capacity. Share accurate updates, useful photos or short videos, and information that helps people decide whether and how to contact you. Reply politely and promptly to customer questions when you can.
Rank #4
Separate organic posts from paid promotion
Organic posts cost no placement fee, but creating and responding to them takes time, and their reach is not guaranteed. Paid promotion is optional. If you test it, choose a small amount you can afford to lose, set a clear goal, and track the response. The SBA’s 2017 suggestion to try a $100 social campaign was an illustration, not a current price benchmark or a promise of results; ad costs and tools vary. SBA, “5 Tips to Make Your Small Business Social Media Savvy,” June 27, 2020
Tell a story local media may find useful
Local outlets may be interested in a genuinely newsworthy business story or a useful expert comment tied to a community issue. Keep a pitch concise, explain why it matters to local readers, and make it easy for a reporter to contact you. Coverage is earned, not guaranteed; treat pitching as a low-cash option that costs preparation time, not as a dependable source of exposure.
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Compare tactics by cost, time, and fit
These are planning comparisons, not performance rankings. Actual cash costs and staff time depend on your location, tools, and execution.
| Tactic | Cash cost | Owner or staff time | Best audience fit | How quickly to try | Meaningful outcome to track |
|---|---|---|---|---|---|
| Listings and relevant directories | May be free or paid; check each platform | Setup and occasional updates | Customers searching for your business type or location | Once eligibility and details are checked | Calls, visits, or inquiries attributed to a listing where available |
| Customer follow-up and referrals | Often low; physical cards are optional | Time to contact customers and respond | Existing customers and their networks | After the next suitable sale or service | Repeat purchases and referred inquiries |
| Cross-promotion, groups, or events | Varies; events or sponsorships may charge a fee | Relationship-building, preparation, and attendance | People served by complementary businesses or relevant local groups | After identifying a partner or event | Partner referrals, event inquiries, or uses of a distinct offer |
| Organic social posts | No placement fee | Content creation and customer replies | Customers who use the selected channel | After selecting a channel and preparing useful updates | Questions, clicks, bookings, or sales you can connect to posts |
| Paid social promotion | Set a test budget you can afford to lose; platform pricing varies | Campaign setup, monitoring, and follow-up | A defined audience the platform can reach | Once you have a specific goal and a way to measure it | Qualified inquiries or sales compared with the campaign cost |
| Local media pitch | Usually no placement fee for an editorial pitch; other costs may vary | Finding a relevant story and preparing a pitch | Readers of local outlets interested in the subject | When you have a timely, locally relevant angle | Coverage, resulting inquiries, or visits if you can identify them |
Measure response and adjust
- Pick a goal. Decide whether you want more calls, bookings, repeat visits, or another outcome that matters to the business.
- Ask new customers how they found you. Add the question to the sales or booking conversation and record answers consistently.
- Use distinct codes for offline promotions. A different code for each print piece or event can help distinguish responses. Keep the offer and code simple enough for staff and customers to use.
- Review available platform analytics. Use the measures available for your listing, website, email, or social channel, but focus on customer actions rather than views alone.
- Compare results with your own goals. Keep a tactic that produces useful responses at a cost and workload you can sustain; revise or stop one that does not. No channel has a universal return for every local business.
For more on choosing channels around customer needs and local capacity, see Business Queensland’s guide to marketing on a small budget. The SBA also outlines local tactics including referrals, cross-promotion, directories, events, groups, and media outreach.
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