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How much should a contractor spend on marketing per month?
There is no single monthly amount: the U.S. Small Business Administration says there is no hard-and-fast marketing budget, and that many businesses use a percentage of revenue as a guide, with a wide range from one business to the next (blog published July 9, 2019). IRS Statistics of Income Table 2 for tax year 2023 shows specialty trade contractors who filed as sole proprietors deducted $1,536,013,000 of advertising against $257,750,287,000 of business receipts, which divides to 0.596% of receipts in aggregate. A monthly figure is a percent of annual revenue divided by 12.
Five percent and ten percent are rules of thumb for that arithmetic, not benchmarks from the SBA or the IRS.
The formulas
Top-down: percent of revenue. Monthly budget = annual revenue × percent ÷ 12, rounded to the nearest dollar.
Bottom-up: revenue goal to ad budget. Jobs = monthly revenue goal ÷ average job value. Leads = jobs ÷ close rate. Monthly ad budget = leads × cost per lead.
Once you have the jobs, that is the same formula as the marketing spend section: monthly lead budget = (jobs you need that month ÷ close rate) × cost per lead.
Placeholder arithmetic only: 4 booked jobs ÷ a 25% close rate = 16 leads, and 16 × $50 a lead = $800 that month. Replace the 4, the 25%, and the $50 with your numbers. That $800 is lead cost, before the website, follow-up, and anyone who manages the ads.
If JavaScript is off, use the formulas above with your own numbers. With JavaScript on, the totals update as you type. Example numbers in the hints are placeholders, not industry averages.
Top-down: percent of revenue
Monthly budget = annual revenue × percent ÷ 12, rounded to the nearest dollar.
Example placeholder: $500,000. A round figure so the arithmetic is easy to check. Not a claim about what contractors earn.
Enter 5 for 5%. Example placeholder: 5. A rule of thumb for the arithmetic, not an SBA or IRS benchmark.
Fill the percent with a labeled example. Not a recommendation.
Monthly budget from your numbers
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Enter your annual revenue and a percent. Nothing is filled in for you.
Bottom-up: revenue goal to ad budget
Jobs = monthly revenue goal ÷ average job value. Leads = jobs ÷ close rate. Monthly ad budget = leads × cost per lead.
Your number. This page does not fill in an example revenue goal.
Your number. This page does not fill in an example job value.
Enter 25 for 25%. Example placeholder: 25. Not an industry average.
Example placeholder: $50. Not an industry average.
Monthly ad budget from your numbers
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Enter a revenue goal, a job value, a close rate, and a cost per lead. Nothing is filled in for you.
What the number does not include
Agency fees and software come on top of the ad budget. They are not inside the bottom-up total. The top-down total is only the percent of revenue you entered, rounded to the nearest dollar.
Where the Contractor Systems price fits
Contractor Systems sits under that budget rather than instead of it: Advanced is $297 a month for the website, lead inbox, missed-call text-back, follow-up, and review requests, Pro is $597 a month, and Master is $897 a month and includes Google Ads management, with the ad spend paid to Google.
What the IRS share is, and what it is not
The 0.596% is the division of the two IRS totals (1,536,013 ÷ 257,750,287). The IRS table does not print that percentage, and it does not recommend a budget. Its note says the figures are estimates based on samples and that money amounts are in thousands of dollars, so the dollar figures are those cells multiplied by 1,000. This is specialty trade contractors, businesses with and without net income, on nonfarm sole proprietorship returns for tax year 2023: 2,521,516 returns. The source line is IRS, Statistics of Income Division, Sole Proprietorship Returns 2023, March 2026. Advertising is one deduction line. A website, an agency fee, or software may be reported on another line, so this is not total marketing spend, and the ratio is an aggregate, not what a typical contractor spends. The SBA post also repeats percentages from other organizations. Those percentages are not used here, because those reports were not re-read.
Read the sourced pages
Questions
How much should a contractor spend on marketing per month?
There is no single monthly amount: the U.S. Small Business Administration says there is no hard-and-fast marketing budget, and that many businesses use a percentage of revenue as a guide, with a wide range from one business to the next (blog published July 9, 2019). IRS Statistics of Income Table 2 for tax year 2023 shows specialty trade contractors who filed as sole proprietors deducted $1,536,013,000 of advertising against $257,750,287,000 of business receipts, which divides to 0.596% of receipts in aggregate. A monthly figure is a percent of annual revenue divided by 12. Five percent and ten percent are rules of thumb for that arithmetic, not benchmarks from the SBA or the IRS.
How does the top-down marketing budget calculator work?
Monthly budget = annual revenue × the percent you enter ÷ 12, rounded to the nearest dollar. Enter 5 for 5%. Five percent and ten percent are rules of thumb for that arithmetic, not benchmarks from the SBA or the IRS. The 0.596% button fills this site's division of the IRS tax year 2023 specialty-trade sole-proprietor advertising and receipt totals. It is not a recommended budget.
How does the bottom-up ad budget calculator work?
Jobs = monthly revenue goal ÷ your average job value. Leads = those jobs ÷ your close rate. Monthly ad budget = leads × your cost per lead. Use your own close rate and your own cost per lead. This page does not cite an industry close rate, an industry job value, or an industry cost per lead. The placeholder on the marketing spend page is 4 booked jobs ÷ a 25% close rate = 16 leads, and 16 × $50 a lead = $800. That $800 is lead cost only. Replace it with your numbers.
Are agency fees included in the calculator total?
No. Agency fees and software come on top of an ad budget. Contractor Systems sits under that budget rather than instead of it: Advanced is $297 a month for the website, lead inbox, missed-call text-back, follow-up, and review requests, Pro is $597 a month, and Master is $897 a month and includes Google Ads management, with the ad spend paid to Google.
Sources for the figures above
- How to Get the Most From Your Marketing Budget. U.S. Small Business Administration. Published July 9, 2019. Checked October 26, 2026. Used for the statement that there is no hard-and-fast marketing budget and that many businesses use a percentage of revenue as a guide, with a wide range. No percentage on that post is used here as a benchmark.
- Table 2. Nonfarm Sole Proprietorships: Income Statements, by Industrial Sectors, Tax Year 2023. IRS Statistics of Income, file 23sp02is.xls. Source line: IRS, Statistics of Income Division, Sole Proprietorship Returns 2023, March 2026. Checked October 26, 2026. Specialty trade contractors, businesses with and without net income: 2,521,516 returns, business receipts 257,750,287, advertising expenses 1,536,013. Money amounts in the file are in thousands of dollars.
- SOI Tax Stats — Nonfarm sole proprietorship statistics. Internal Revenue Service index page that links the Table 2 file. Checked October 26, 2026.
The system that catches the leads is a separate line.
The calculator is the ad budget or the percent of revenue. Contractor Systems is the website, the inbox, the follow-up, and the review requests those leads land in.