Somewhere between 5 and 10 percent of your revenue. But if you want the honest version, your contractor marketing budget depends way less on a percentage and way more on what it costs you to book one actual job.
I know, I know. You came here for a number and I gave you a shrug. Stick with me for four minutes and I'll hand you a real one.
I can't count how many owners have poured a coffee, looked me dead in the eye, and asked, "Daniel, just tell me the number." So let's do that. But we're doing it right. A flat percentage is how owners torch cash in a slow market or badly underspend in a hot one, and they never know which mistake they're making.
The short version: 5 to 10 percent of revenue is a decent starting guess, not gospel. A $500K roofing shop crammed into Dallas and a $3M shop humming along in a quiet county cannot spend the same. The number that actually runs the business is your cost per booked job. Spend the money on foundations first, paid for speed, SEO for the future, and fast follow-up as the cheapest multiplier you own. And stop renting leads when you could own the whole faucet.
Where the "5 to 10 percent" thing even comes from
It's not made up. The SBA tosses around 7 to 8 percent of revenue for businesses under $5M. The big CMO surveys put most companies in the 7 to 10 percent neighborhood most years. So when people say "5 to 10 percent," they're standing on real ground.
Here's the problem. A percentage is a rearview mirror. It tells you what businesses on average did, not what YOUR business in YOUR town with YOUR margins should do next month. It's like asking how much you should spend on gas and getting told "the national average is $200." Cool. I drive a truck 400 miles a day and my brother-in-law walks to work. That average is useless to both of us.
So how much should a contractor spend on marketing? Enough to book jobs at a cost that leaves you smiling. That's the whole game. Let me show you the number that gets you there.
The only number that actually runs your shop: cost per booked job
Forget the percentage for one second. I want you to find one number and tattoo it on the back of your hand.
Cost per booked job. Take what you spend on marketing, divide by leads, that's your cost per lead. Then divide by your booking rate, the percentage of leads that turn into a job on the calendar. Now you've got cost per booked job.
Say you spend $4,000 and get 80 leads. That's $50 a lead. You book 1 in 4, so 20 jobs. Your cost per booked job is $200. Now the real question, the one that actually matters: what's a job worth to you? If your average job is $600 with healthy margin, you just spent $200 to make $600 and you should be sprinting to spend MORE. If your average job is $220, you're basically working for the privilege of working. Rough.
This is why two shops with the same revenue need wildly different budgets. High-ticket, fat-margin work can eat a bigger cost per booked job all day. A thin-margin volume business has to be surgical. The percentage never told you any of that. Cost per booked job tells you everything.
A contractor marketing budget a shop your size can actually use
Alright, you still want the table. I get it, a starting point is a starting point. Here's the honest contractor marketing range by revenue. Each row shows what your money should mostly buy at that stage. Notice the percent drops as you grow while the dollars climb. That's not a typo. Big shops get more efficient per dollar and still write bigger checks.
| Annual revenue | Typical marketing range | Rough monthly budget | What it should mostly buy |
|---|---|---|---|
| $500K to $1M | 8 to 12 percent | $3,300 to $10,000 | Foundations: Google Business Profile, reviews, a fast site, entry into paid search |
| $1M to $3M | 7 to 10 percent | $5,800 to $25,000 | Scaling paid and owned together |
| $3M to $5M | 6 to 9 percent | $15,000 to $37,500 | Compounding assets: brand, content, tighter tracking |
| $5M+ | 5 to 8 percent | $20,800+ | Efficiency and market share |
One caveat before you screenshot that. If you're in a crowded metro where every homeowner is drowning in van wraps and yard signs, push toward the top of your range. If you're the only decent option in a sleepy county, you can live near the bottom and still print jobs. Geography is a bigger lever than most owners think, and it never shows up in a flat percentage.
How to actually split a contractor marketing budget
A budget with no plan is just an expensive way to feel busy. Here's how I carve it up, in order of who gets fed first.
- Foundations, always on. Your Google Business Profile dialed in, a steady drip of real reviews, and a website that loads before someone gives up and calls the next guy. This is the cheapest, highest-return money you will ever spend and most owners treat it like a chore. Do it first.
- Paid, for speed. Google Ads and the local pack are how you get the phone ringing this week instead of next quarter. Paid is a faucet. You turn it on, water comes out. You turn it off, it stops. Great for speed, terrible as your only plan.
- Owned SEO, for the future. SEO is the well you dig while the faucet runs. Slow to start, then it just... keeps giving. Every month you skip it, you're renting when you could be building equity.
- Follow-up, the cheap multiplier. This is the money nobody budgets and everybody needs. Speed to lead and a real follow-up system can double the jobs you get from the exact same spend. You already paid for those leads. Answer them. Fast.
That last one is the closest thing to free money in this whole business. I've watched hundreds of owners pour cash into ads. Then they let the leads sit in an inbox until those leads go cold and call somebody else. You bought the bread and let it get stale on the counter. Come on.
Renting leads versus owning the faucet
Here's where I get a little fired up. There's a giant difference between renting leads and owning the thing that produces them.
Buy leads off a marketplace and you're renting. It's the same kind the FTC fined HomeAdvisor $7.2 million over how it sold them. The day you stop paying, the whole thing evaporates. You're back to a blank calendar and a fond memory. Build your own presence instead, your profile, your reviews, your rankings, your follow-up system, and you own an asset that keeps working whether or not you spent a dime that day.
I've sat across the desk from owners who stayed flat for years. They bought leads and never really owned anything. Then I watched those same owners take off once they built lead flow that belonged to THEM. Same owner, same trucks, same trade. The only thing that changed was who owned the water. A bought lead is a faucet the landlord can shut off. Your own demand is a well. That's the whole difference, and there's no magic trick in it.
A faucet the landlord can shut off
Stop paying and the whole thing evaporates. A blank calendar and a fond memory.
A well that keeps giving water
Your profile, reviews, rankings, and follow-up keep working whether or not you spent a dime today.
Am I saying kill your paid ads and go all-in on the slow stuff? Nope. That advice sounds bold at a conference and it will starve your calendar by March. You want both. Paid for speed today, owned for freedom tomorrow. The mistake is renting forever and calling it a marketing strategy.
So, the real answer
Start at 8 to 12 percent if you're under a million, and drift down toward 5 to 8 as you scale. But the second you have a little data, throw the percentage in a drawer. Run the business on cost per booked job against what a job is worth to you. When that math is good, your only problem is deciding how much MORE you can spend. Good problem to have.
Is getting there a grind up front? Yep. Building your own lead flow always is. But renting forever is a grind too, and at the end of it you own exactly nothing.
If you want to see how we help contractors stop renting and start owning the whole thing, take a look at how we think about contractor marketing, poke around how it works, or just go see the results for yourself. No pressure. The faucet will still be there when you're ready.
Stop renting your growth. Own it.
We build the whole engine and run it for you, with nothing held hostage. One company per trade, per market.
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