If you're a local business owner, "how much should I spend on marketing?" is probably the most frustrating question you face.
You’ve likely heard a dozen different answers. You’ve probably tried guessing, or just spent "whatever was left over" at the end of the month. You’ve felt the sting of "spraying and praying"—spending money on ads and having no idea if it actually worked.
At Sprout IQ, we're not just a local agency. As part of the Best Version Media (BVM) family, we have worked with thousands of small and medium-sized businesses across North America. We have one of the largest datasets in the world on what actually works for local marketing.
From this vast, hands-on experience, we’ve cut through the noise and developed a clear, simple framework to take the guesswork out of your budget.
We call it the 5/10/15% Rule.
This isn't just a theory; it's a strategic tool, proven by thousands of businesses just like yours. It’s designed to align your spending directly with your goals, turning marketing from a confusing expense into a predictable investment.
And our findings are strongly validated by top Canadian business authorities. The Business Development Bank of Canada (BDC), in its advice for small businesses, outlines a very similar benchmark. Let's break down how it all works.
The 3 Levels of Your Marketing Budget
The "right" amount to spend is a percentage of your total revenue, and it depends entirely on your goal.
✅ Level 1: 5% of Revenue — The "Steady" Budget
Our data from thousands of businesses shows that this is the baseline budget to maintain your current position and protect your market share.
This principle is directly supported by the BDC. In their article, "What is an average marketing budget for a small business?", they note that a common rule of thumb is 2-5% of revenue for B2B (business-to-business) companies and the low end of 5-10% for B2C (business-to-consumer) companies.
At 5%, you're not aiming for aggressive growth; you're playing defence. This budget covers the essentials: keeping your online listings accurate, maintaining a basic social media presence, and ensuring that existing customers and new referrals can find you.
- Goal: Maintenance & Protection
- Best For: Established businesses with stable revenue.
✅ Level 2: 10% of Revenue — The "Growth" Budget
This is where we see the real magic happen. In our experience, this is the budget to actively grow your business.
At 10%, you have the capital to invest in a system, not just random acts of marketing. This is the sweet spot for most local businesses looking to expand, and it aligns perfectly with the BDC's recommendation for B2C businesses that are serious about growth.
This budget allows you to build a multi-channel strategy, like combining the trust of local print advertising (our specialty at BVM) with the precision of targeted digital ads. This is how you generate a consistent flow of new leads and measurably grow your customer base.
- Goal: Active Growth & Lead Generation
- Best For: Businesses ready to handle more customers and scale up.
✅ Level 3: 15%+ of Revenue — The "Skyrocket" Budget
This is your "all-in" budget, reserved for aggressive, rapid scaling.
The fastest-growing businesses in our network of clients are the ones who re-invest heavily in their success. This 15%+ budget is for businesses aiming to dominate the market. While the BDC's general advice provides a stable 5-10% range, wider market data (and our own experience) shows that high-growth startups often invest up to 20% to capture market share.
You should only consider this level if you have two things:
- A proven, repeatable marketing system that is already delivering results.
- The operational capacity (staff, inventory, systems) to handle a major influx of new business.
- Goal: Market Domination & Rapid Scaling
- Best For: Businesses with a proven system, ready to scale fast.
From Guesswork to "Growing Smarter"
Stop asking, "How much should I spend?" Start asking, "What is my goal?"
- Do you want to maintain? Your budget is 5%.
- Do you want to grow? Your budget is 10%.
- Do you want to scale? Your budget is 15%.
It’s that simple.
This isn't just theory from a textbook. The 5/10/15% Rule is a proven roadmap based on the results of thousands of businesses, validated by trusted Canadian resources like the BDC.
By tying your budget to your revenue, it scales with you. By tying it to your goals, it gives every dollar a purpose. You're working too hard to waste money on guesswork. It's time to build with intention.
Ready to build a marketing plan based on data, not guesses?
When you work with Sprout IQ, you get two incredible advantages: the "white-glove" local service of a team that knows the Quinte region, backed by the power, data, and experience of the entire Best Version Media network.
We know what works. Let us build your blueprint.
%20(1).webp)
