How much to spend on marketing?

Small businesses often do not know how much to spend on marketing. Decisions on expenditure are made on a 'whatever we can afford at the moment' basis, which among other things means that the marketing budget is the first to be squeezed when times are hard.

Instead of this 'finger in the air' method, your annual marketing budget should be based on:

  • Last year's budget - perhaps with a small increase
  • What you think your competitors are spending
  • A percentage of sales (last year's or next year's)

Ideally, your annual expenditure on marketing should reflect the sales growth you want to achieve in the coming year. It may sound odd, but you don't always want to grow at the fastest rate possible. For example, there is no point in setting a growth target and a corresponding budget if you cannot meet the extra demand.

Typical growth targets and the corresponding marketing budget as a percentage of sales are:

Steady growth - a budget of 2%-3% of sales
Rapid growth - 5%-10% of sales

SJD Accountancy

SJD Accountancy are the UK's largest specialist provider of fixed fee, Limited company accountancy services to contractors; we've been acting for contractors across the UK since 1992 and have more than 15,000 clients.

We are the only national specialist firm of contractor accountants with offices nationwide. SJD Accountancy has more qualified staff than any other firm in our market with qualifications from the following major tax and accountancy bodies - ATT, AAT, CTA, ACCA, CA, ACA and FCCA.

  • Unlimited face to face meetings. This is a unique service only SJD Accountancy offers - unlimited face to face meetings across the UK - tax is complicated and sometimes only a meeting will do.
  • UK's Largest contractor accountants with more qualified staff. No call centres, no outsourcing, no automated call handling. Simply telephone, email or meet your own dedicated accountant* face to face.
  • Money back service guarantee. All your telephone calls and emails will be answered the same day or we will make a full refund of that months fee.
  • Outstanding reputation. We have won more awards for customer service and accountancy excellence than any other firm in our market, including: Best Accountant for Contractors, Accountant of the Year and Best Professional Service Team to name just a few.
  • All inclusive low cost fixed fee accountancy package which includes completion of accounts*, payroll bureau, dividends and corporation tax computations, personal taxation, free bookkeeping software, your own dedicated accountant* and all company returns for a fixed fee of £120 plus VAT per month.

If you have any questions about contracting or would like any further advice please call our new client services helpdesk on 01442 275789 or email:

Appoint SJD Accountancy and never worry about your tax or accountancy affairs again.

Form your own Limited company with SJD - our same day online company formation service includes company bank account set up, VAT/PAYE registration and advice on optimum share structure. 

You may also find the following pages, guides and case studies useful:

*If you would like us to complete your company year end accounts we simply ask that you have been a client of SJD for one year or have made 12 monthly payments. All accountants are part or fully qualified.