The amount a small business should spend on marketing can vary widely depending on the industry, business size, and growth stage. As a general guideline, businesses often allocate around 7-8% of their gross revenue to marketing if they're making less than $5 million a year in sales and have net profit margins in the 10-12% range (after marketing costs). However, this can vary. New businesses might need to spend a higher percentage (up to 20%) to establish themselves.