How Much Should a Service Business Spend on Marketing?

How much should a small business spend on marketing?

Enough to win the jobs you need, at a cost those jobs can pay for. You can work out that number from four figures you can find in your own records:

Sold jobs you want ÷ close rate ÷ booking rate × cost per lead = monthly marketing budget

A percentage of revenue is easier to set, and it's what most owners hear. The trouble is that it starts from last year's sales instead of next year's goal. It also ignores what a lead costs in your town. Figure 1 compares the two methods.

What does the SBA say about a small business marketing budget?

It says to itemize your costs and measure them. It doesn't give a percentage. The marketing section of the SBA's "Manage your business" guide (updated July 30, 2026) says:

We checked the whole guide on October 14, 2026. It has no recommended share of revenue for marketing. A 2019 post on the SBA's blog quoted averages from outside surveys, and you'll often see figures like those repeated as "the SBA's recommendation." They aren't in the SBA's current guidance.

What do marketing budget surveys show?

Two surveys of senior marketing leaders put marketing at 7.8% to 9.0% of revenue (Figure 2). Gartner's respondents were mostly at companies with over $1 billion in annual revenue.

Use these for context only. Companies with a marketing department budget for things a five-truck shop doesn't, like brand campaigns and marketing staff. And a percentage tells you nothing about whether your next dollar will book a job.

How to build a marketing budget from a booked-jobs goal

Work backward from the jobs. Figure 3 shows the order.

Use your own numbers where you have them. Until you do, here are published benchmarks:

Run the same math for different jobs and the answer swings hard (Table 1).

Inputs: 62% close rate (ServiceTitan, 2026); booking rates by trade (ServiceTitan, 2022); $90.92 median cost per lead for Home & Home Improvement (WordStream, 2026); average job values from Angi (updated July 20 to August 4, 2026). Revenue, not profit.

Two lessons come out of that table. First, at the median cost per lead, small tickets don't cover the leads on the first visit. At $350 a repair, 10 jobs bring in less than the leads cost. Any payoff comes from repeat work and later replacement calls, so track those customers over a year, not a month.

Second, your booking rate moves the budget as much as your ad price does. At the 24% booking rate ServiceTitan found for shops with fewer than 5 techs, the same water heater goal takes 68 calls and $6,183 a month (Local Voice calculation). Every point of booking rate you gain lowers the cost of hitting the same goal. Our guide to tracking your call booking rate shows how to measure yours.

What does a lead cost a home service business?

For search ad campaigns on Google Ads and Microsoft Ads, the median was $90.92 for Home & Home Improvement in WordStream's 2026 benchmarks. That's above the $66.69 all-industry median (Figure 4).

A lead isn't a job. At the 43% plumbing booking rate and a 62% close rate, a $90.92 lead works out to about $211 per booked appointment and $341 per sold job (Local Voice calculation). That's the number to hold up against your average ticket.

The same report puts the Home & Home Improvement conversion rate at 8.05% and the cost per click at $8.33. Treat these as a starting guess. A plumber's cost per lead in a big metro can look nothing like a roofer's in a small town. After a month or two, your own number replaces the benchmark.

When you set a Google Ads budget, Google works from a daily figure. Its help page says to divide the monthly amount by 30.4. You may be charged up to "two times your average daily budget for most campaigns" on a given day, but not more than 30.4 times it in a month. For the $3,455 example, that's about $114 a day (Local Voice calculation).

If you run Local Services Ads, our plain-English guide to Google Local Services Ads covers how they're priced.

Where do home service businesses get their leads?

Owners name referrals and repeat customers most often. In Jobber's 2026 Home Service Trends Report, a survey of 1,050 U.S. home service business owners, 59% named referrals and 59% named repeat customers as top lead sources (Figure 5).

Referrals and repeat work cost little in cash, but they don't happen on their own. They come from good work and steady follow-up, including asking for reviews. Our guide on how to get more Google reviews covers the asking. Spend paid budget to fill the gap between what referrals bring in and your jobs goal.

How should you split the budget across channels?

Start with what costs the least cash, then add paid channels one at a time. This is our advice, not a benchmark:

Plan around your busy season too. ServiceTitan's August 2026 report found January water heater installs ran 18% to 24% above an average month in 2024 and 2025. A plumber chasing those jobs wants the budget live before the cold hits, not after. Our seasonal marketing calendar for home service businesses maps out the year.

How do you know if your marketing budget is working?

Compare what you spent with the booked work it brought in, every month. The SBA's guide also says to compare marketing costs with the revenue they bring in. Figure 6 is the short list we'd track.

If the cost per booked job is more than the job can carry, fix the cheaper problems first. Answer more of the calls you already get, and book more of them. Then decide whether to spend more. Our home service marketing plan for 2027 walks through setting the goal and picking channels.

Frequently asked questions

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Pick your trade, enter how many calls you miss and what a job is worth. The free calculator shows the sales you lose each month, each year and per missed call, using published booking and close rates.

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Methodology

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