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Marketing Budget Calculator

Enter your revenue, your target and what a customer is worth. You get a monthly budget, a channel split and the CAC ceiling you can't go above.

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Short answer

Marketing Budget Calculator: what it does

Established small businesses spend 5–10% of revenue on marketing; companies chasing growth spend 15–20%. The number that matters more is your CAC ceiling: never pay more to acquire a customer than a third of what they're worth to you over their lifetime.

Last updated 3 August 2026

Worked example

Here's one we ran earlier.

£20,000/month revenue · early stage · 20 new customers a month · £600 lifetime value

Monthly budget — £3,000
15% of revenue
15% of revenue, which is the early-growth band. That's the ceiling for media and tools combined, before any salaries.
CAC ceiling — £200
3:1 LTV:CAC
A third of £600 lifetime value. Above this, each new customer costs more than they'll ever return, no matter how good the channel looks.
Your target needs £150 per customer
Affordable
£3,000 ÷ 20 customers. That's inside the £200 ceiling, so the target is affordable. If it had come out above £200, the target would need to drop.
The split — £1,800 / £750 / £450
60 / 25 / 15
£1,800 into what already converts, £750 into compounding assets like SEO and email, £450 into one test a month you're prepared to write off entirely.

How it works

Three steps, no account.

Step 1

Start from lifetime value, not revenue

Revenue percentages are a sanity check. The hard limit is what a customer is worth: spend more than a third of lifetime value to acquire one and you're buying revenue you can't afford.

Step 2

Split it across horizons, not channels

Roughly 60% to things that work now, 25% to things that compound like SEO and email, 15% to tests. Channels change; that split doesn't.

Step 3

Check the target is affordable

If your budget divided by your target customer count is under the going rate for a click in your market, the target is wrong, not the budget.

Questions

Common questions.

What percentage of revenue should go to marketing?

5–10% for an established business defending its position, 15–20% for one actively chasing growth, and for pre-revenue companies the question doesn't apply — size the budget from your customer target and your CAC ceiling instead.

What is a CAC ceiling?

The most you can pay to acquire one customer without the maths breaking. A common rule is a 3:1 ratio of lifetime value to acquisition cost, so a customer worth £600 gives you a £200 ceiling. Under 1:1 you lose money on every sale.

How should I split the budget between channels?

Put about 60% into whatever is already producing customers, 25% into compounding assets like SEO content and email that pay off in months not days, and hold 15% for tests you're willing to lose entirely.

What if I have no budget at all?

Then your budget is time, and it should go to channels that cost time rather than money: direct outreach, communities where your customers already are, partnerships, and content on questions people are searching for. Set a weekly hour count and treat it exactly like a budget.