Most home services companies should set their marketing budget percentage of revenue between 7 and 12 percent of gross revenue, and push higher while growing fast. Where you land depends on margins, cash flow, and growth targets. Here is how we plan it with business owners in home services marketing.
By Christian Absher
What Is a Marketing Budget?
A marketing budget is the amount of money a company plans to spend on marketing over a set period, usually a year, and then tracks month by month. It covers advertising, your website, local SEO, review requests, content, and the tools and people who run them. It keeps marketing spend tied to revenues instead of to mood.
Most business owners set it as a share of gross revenue. A marketing budget percentage of revenue is the cleanest starting point because it grows when you grow and shrinks in a slow year, which protects cash flow. Percentages are also easier to defend than a flat dollar amount that nobody can explain. The exact number comes later. The percentage comes first.
Does Marketing Budget Include Salary?
It can, but pick one rule and keep it. Some owners count the pay of an in-house marketer. Others count only outside costs such as ads and agency fees. Counting salary makes your percentage look bigger and makes comparisons with published benchmarks unfair, because published figures do not all count the same things.
We split the plan into two lines. Program spend covers ads, SEO, content, and tools. People covers salaries and commissions for anyone whose job is marketing. At larger companies a chief marketing officer (CMO) sits in the people line. Most small businesses have no CMO, so the owner's own hours are the hidden cost. They belong on your list even if no check gets cut.
What Marketing Budget Percentage of Revenue Should a Home Services Company Use?
Most home services companies land between 7 and 12 percent of gross revenue. The U.S. Small Business Administration has long suggested that small businesses with healthy profit put roughly 7 to 8 percent of gross revenue into marketing. The ranges below start there and adjust for business stage. Treat these percentages as working ranges, not law.
| Business stage | Typical share of gross revenue | What it usually funds |
|---|---|---|
| Established and steady | 5 to 8 percent | Holding lead flow steady: maintenance SEO, reviews, a measured ad presence |
| Growing | 8 to 12 percent | New service areas, wider ad coverage, steady content |
| New or pushing hard | 12 to 20 percent | Building lead flow and local visibility from a small base |
Three things move you inside a range: the profit on a typical job, how many repeat customers each new customer tends to bring, and whether your crews have room to take more work. Spending to fill a calendar that is already full wastes marketing investments.
Is 10 Percent of Revenue a Good Marketing Spend for a Small Home Services Business?
Often, yes. Ten percent sits in the growth band, and it works when crews have capacity and profit supports it. The catch is profitability. Every percentage point you spend comes straight out of profit until the new jobs arrive. That is fine when the marketing investments buy growth you can measure, so set ROI targets before you spend. It is risky when nobody tracks where calls come from. Small businesses with thin profit should start lower and earn their way up.
How Much Should a Home Services Company Spend on Marketing as a Percent of Sales?
Sales and revenue are the same base here, so the same ranges apply. Base the percentage on your annual revenue target for the coming year if you plan to grow. Use last year's actual revenues if you plan to hold steady. Then allocate the money in monthly steps tied to booked jobs, not in one lump.
Should a New or Fast-Growing Company Spend a Higher Percentage of Revenue on Marketing?
Usually, yes. A new company has a small revenue base, so even high percentages of it buy very little marketing. Aggressive growth strategies need a floor. Customer acquisition is also front-loaded: reviews, rankings, and repeat business take months to build. The limit is cash flow. Commit only what you can keep spending through the full ramp, because stopping early wastes everything already spent.
What Is the Average Marketing Budget by Industry?
The average marketing budget by industry swings widely, and no single published average fits a home services company. Gartner's annual CMO Spend Survey tracks large companies and has put their budgets in the single digits as a share of company revenue in recent years. Those firms have different audiences, profit structures, and sales cycles than a plumbing or roofing shop, and surveys differ on whether they count salary. Compare business models, not headlines, and use published benchmarks as a starting point only.
| Business model | Why the share differs | Direction |
|---|---|---|
| Emergency trades (plumbing, HVAC, electrical) | Urgent searches; map rankings and ads win the call | Mid to high, mostly in search |
| Project-based (roofing, remodeling, solar) | Big tickets, long decisions, costly leads | Higher |
| Recurring service (pest control, pool, cleaning) | Repeat customers raise lifetime value | Higher early, lower later |
| SaaS (subscription software) | Heavy upfront acquisition, paid back over subscription years | Often higher than trades |
| Ecommerce | Product profit caps what a sale can carry | Set by product profit |
SaaS (software as a service) is the useful contrast. A SaaS company pays heavily for customer acquisition up front and earns it back over years of subscriptions, so a larger share of revenue can make sense. A home services company earns on each job. That makes CAC (customer acquisition cost, the spend it takes to win one customer) a number you can check against job profit fast. CAC and ROI are the metrics to watch, and different business models tolerate very different numbers. Even inside one trade, company sizes change the answer, because a one-truck operator and a twenty-crew firm face different ceilings and need different strategies.
A Marketing Budget Example for a Home Services Company
Picture a residential HVAC company that sets 9 percent of its annual revenue as its marketing budget. The split below shows how to allocate it, following a 70-20-10 pattern: about 70 percent to channels that already bring calls, 20 percent to channels that are building, and 10 percent to tests. The shares are illustrative. Your market changes them.
| Budget line | Share of the marketing budget |
|---|---|
| Paid search and map ads | 35 percent |
| Local SEO, website, and Google Business Profile | 25 percent |
| Reviews and past-customer follow-up | 10 percent |
| Content and social | 20 percent |
| Testing new channels | 10 percent |
Season bends the monthly plan. An Arizona HVAC shop leans its campaigns toward late spring, before the first triple-digit stretch, while a pest control company runs steadier all year. The same annual percentage produces uneven monthly spend, and that is on purpose, since spring spend funds the groundwork ahead of the summer season.
How Much Does Marketing Cost Per Month?
It depends on your trade, your service area, and how many mediums you use. We cannot give an honest figure without those facts, but we can show what the monthly bill is made of.
| Line item | What moves it | How it is usually billed |
|---|---|---|
| Ad spend | Competition in your city, your trade, the season | Paid straight to the ad platform |
| Management fee | Number of channels and accounts, depth of reporting | Monthly to the agency |
| Website and content | Pages and posts per month, one-time builds | Monthly or per project |
| Local SEO | Number of locations and service areas | Often monthly |
| Tools and tracking | Call tracking, CRM, review software | Software subscriptions |
The usual surprises are simple. Ad spend is normally separate from the management fee, so if a quote bundles them, ask how much reaches the ads. Setup and website builds are often billed on their own. Different approaches, such as pay-per-click ads versus local SEO, are billed in different ways, so compare line by line. Click prices also vary by multiples: an urgent trade in a large metro often pays a multiple of what a slower service pays in a small town.
Five questions get you an accurate quote:
- What is included in the fee, and what is billed separately?
- How much of my money reaches the ad platform?
- Who owns the accounts, site, and tracking if we stop?
- How long is the commitment?
- Do you report booked jobs, or only clicks?
To quote your job we need your trade and most profitable services, your service area, your crew capacity, any past results, and your revenue target. Bring those to a free SEO consultation and we will price each line against your market.
How Do You Set a 2027 Marketing Budget Based on Growth Goals?
Work backward from the revenues you want, then check the result against the percentages in the ranges above. The order matters, because a percentage alone ignores what your jobs are worth and what your marketing strategy needs to deliver.
- Set the revenue targets. Pick the annual revenue you want in 2027 and the number of jobs that takes. Divide the target by your average job value.
- Find the leads behind those jobs. Divide jobs by your close rate to see how many leads you need.
- Price a customer. Your CAC is marketing spend divided by new customers won. Compare it with profit per job and with lifetime value, meaning what a customer is worth across all the jobs and referrals they bring. Then set CAC targets for each channel.
- Check capacity and cash flow. Spend runs ahead of revenue, so confirm you can carry these investments through the ramp.
- Allocate in layers. Put most money into proven channels and campaigns, some into growing ones, and a little into tests. Review budget allocations every quarter and optimize by moving money toward what books jobs.
Two mistakes trip owners up. The first is chasing clicks instead of booked jobs, which wrecks ROI math before it starts. Tracking comes first, and the metrics worth tracking are calls and booked jobs. Before changing spend, we measure which leads turn into booked jobs, because cost per lead alone says little about what the budget is actually buying.
The second mistake is spreading a marketing strategy across every medium. A plan that picks a few campaigns and funds them properly beats one that funds ten thinly. Different audiences also call for different strategies: a homeowner with a burst pipe searches differently from one planning a remodel. When we build a marketing strategy, we match the ROI targets and the budget to each of those audiences, and we judge marketing spend by profit, not by activity.
Home Services Marketing Budgets: Your Questions Answered
How much of a business budget should go to marketing?
Most owners measure it against revenue, not total expenses, and benchmarks are usually quoted the same way. For a home services company that usually means 7 to 12 percent of gross revenue, with new or fast-growing firms going higher and steady firms lower. Profit, crew capacity, and cash flow decide where you land. Pick the percentage first, then check that your cash flow can carry it.
What is the 70-20-10 rule in digital marketing?
It splits a marketing budget by risk. About 70 percent goes to channels that already produce leads, 20 percent to channels showing promise, and 10 percent to experiments. It keeps the core steady while leaving room to learn and optimize. Treat it as a guide for budget allocations, not a law, because a small company may test less.
How much does advertising cost per month?
Advertising is two bills: the media you pay the platform and any management fee. Media depends on your trade, city, and season, and you control it with a monthly cap. Urgent trades in large metros pay a multiple of what slower services pay in small towns. Ask every quote to separate the two lines so you can see what reaches the ads.
What is a good digital marketing budget percentage of revenue?
Digital is often the largest share of a home services budget, because search and map listings are where homeowners look. Treat it as part of the overall 7 to 12 percent range, not a separate number, and judge those marketing investments by calls and booked jobs. Offline approaches such as truck wraps and yard signs usually take a smaller slice.
Get a Marketing Budget Built Around Your Revenue Goal
Tell us your trade, service area, and revenue target, and we will build the plan, the strategies, and the budget around your numbers, then run it for you. When you are ready to talk it through, contact Brotherly SEO.
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