How much should a home-service business spend on marketing?

The best public record of real spending is the IRS. In tax year 2023, about 2.5 million specialty trade contractors filing as sole proprietors reported $1.54 billion in advertising against $257.75 billion in business receipts. That's about 0.6%. Between 2019 and 2023 the share stayed between 0.52% and 0.60%, about half the 1.12% to 1.18% reported across all industries in those years.

Source: IRS Statistics of Income, Nonfarm Sole Proprietorship Statistics, Table 2, tax years 2019–2023. Total advertising divided by total business receipts; figures are IRS estimates from samples.

Read it with three limits in mind:

• Sole proprietors only. Companies that file as corporations or partnerships aren't in this table, and we found no recent IRS table with their advertising costs at this level of detail.
• It's a total, not a typical business. Total advertising divided by total receipts says nothing about what a median business spends.
• Not every trade is in it. Specialty trade contractors covers trades such as plumbing, HVAC, electrical, roofing and painting; services such as pest control and landscaping are classed elsewhere.
• "Advertising" is one expense line. We can't tell from the table where owners recorded lead fees, agency fees or software; some may sit on other lines.

What this means for you: most trade businesses spend little on advertising, and many rely on referrals. One retired remodeler told a contractor forum that his whole advertising budget for his last fifteen years in business was a box of business cards. If you want faster growth than referrals give you, you'll spend more than the average, and the question is how much more.

Most percent-of-revenue rules trace back to opinions, not studies. The 7% to 8% figure appeared in a 2012 post on the SBA's community blog, with no source and a condition that's usually left off: it assumed revenue under $5 million and margins of 10% to 12%. The 10% figure comes from an agency's webinar recap on a trade association blog.

Here's what each source says, in its own words:

• SBA community blog, June 4, 2012. The post said "small businesses with revenues less than $5 million should allocate 7-8 percent of their revenues to marketing," and added: "This percentage also assumes you have margins in the range of 10-12 percent." It gave no source. It also described typical allocations "between 2-3 percent for run-rate marketing and up to 3-5 percent for start-up marketing."
• SBA blog, July 9, 2019. The SBA's later post says: "There's no hard and fast answer to how much your marketing budget should be." It suggests asking "your industry trade association" for benchmarks. The same post cites outside averages, such as 1.08% of revenue on advertising from a business news site, without the method behind them.
• ACCA HVAC Blog, December 2, 2025. A recap of a webinar by an advertising agency that is an ACCA Strategic Partner: "If you're looking for growth, plan to invest 10% of gross revenue in marketing," calculated "on the revenue you want to achieve rather than current revenue."

What this means for you: a percentage is a sanity check, not a plan. If your margin is thinner than 10%, the 7% to 8% rule never applied to you. If someone quotes "the industry standard," ask where it comes from.

Neither is a budget rule. The best-documented "1% rule" is Jakob Nielsen's 2006 90-9-1 pattern for online communities, where 1% of users account for almost all the activity. We found no original source for spending 1% of revenue on marketing. The 40-40-20 rule is an old direct-mail rule of thumb about what makes a campaign work.

• The 1% rule. Nielsen wrote that in most online communities, "90% of users are lurkers who never contribute, 9% of users contribute a little, and 1% of users account for almost all the action." That's useful if you're counting on customers to post reviews or photos unprompted, and it's why you have to ask. If you've heard "spend 1% of revenue," the IRS figures above are the closest real number we found: about 0.6% of receipts for advertising.
• The 40-40-20 rule. It's usually credited to direct-marketing expert Edward Mayer. As the U.S. Chamber of Commerce's CO— site put it in 2021, a direct marketing campaign's success relies on "Your audience – 40%," "Your offer – 40%" and "The execution – 20%." We found no original publication by Mayer stating it. It tells you who to mail and what to offer matter more than the design. It doesn't tell you how to split a budget.

A marketing budget is everything you spend to win work, not only ads: agency or freelancer fees, ad spend paid to platforms, lead fees, tools such as a CRM and call tracking, your website, printed and vehicle marketing, and the hours you or your office put in. Count all of it, or every job looks cheaper than it was.

Keep the agency fee and the ad spend on separate lines. A management fee buys work; ad spend buys clicks or leads. When you compare quotes, compare the total. Our lead generation guide compares the seven main lead sources by what you pay for and who keeps the customer.

Start from capacity, not revenue. Work out how many more jobs your crews can take each month, how many leads it takes to book one, and the most you can pay to win a job and still make the margin you want. Those three numbers give you a ceiling on cost per lead and a monthly budget to test against.

An example with made-up numbers, not benchmarks:

1. Capacity: your crews can take 12 more jobs a month.
2. Booking rate: you book 1 in 3 leads, so you need about 36 leads.
3. Profit per job: an average job leaves $1,000 after materials and labor.
4. Your limit: you'll spend up to $250 of that to win the job. That's your target cost per booked job.
5. Cost per lead ceiling: $250 ÷ 3 leads per job ≈ $83 a lead.
6. Budget: 12 jobs × $250 = $3,000 a month across your paid sources.

Then check each channel against what it needs to work. Google's Local Services Ads help says that with automated bidding, "It is recommended to set a minimum budget of 10 leads per week for optimal results." If your budget can't fund that, a smaller test may not tell you much. Owned channels (your Google Business Profile, reviews and website) cost time or a monthly fee rather than a per-lead price, so they sit in the budget as a fixed line.

Review the numbers after a full season, not a week. Our lead generation guide shows how to work out cost per booked job by source.

Each level buys a different kind of work. With little cash, you buy your own time on free Google tools. A few thousand dollars buys a one-off project: an audit and plan, or a website. A monthly program buys steady work on search, your profile, reviews and conversion. Ad and lead spend sit on top and stop when you stop paying.

No major lead platform publishes a price per lead by trade: Google, Angi and Thumbtack all price by competition, the job and your settings. Our lead generation guide quotes each platform's rules, and cost per lead shows how to work out the most you can pay.

Yes, mainly through two things: how much competitors bid for the same customers, and when customers search. Ad clicks cost far more in some trades than others, and demand rises and falls through the year. We know of no public source for what each trade spends on marketing; the IRS groups all specialty trade contractors together.

• Competition. In Atlanta, a Google Ads click on "garage door repair" costs about $84.52, against about $23.89 for "electrician" (Google Ads estimates through DataForSEO, Atlanta city target, average of the last 12 months, pulled October 20, 2026). The same budget buys far fewer clicks in a crowded trade.
• Season. In our demand research, the busiest month for searches changed from year to year in every trade we measured. HVAC has two seasons: "AC repair" searches peaked in June or July in each of 2023, 2024 and 2025, and "furnace repair" in November or December. Roofing's busiest month on the four-year average was September, but it moved between years.

What this means for you: keep money you can move. Paid channels you can turn up and down (LSA budgets and Google Ads) let you follow demand; owned channels keep working through the quiet months. Our guide to slow-season marketing covers the quiet months, and HVAC marketing ideas covers both HVAC seasons.

Track every call and form back to its source, count the jobs each source books, and divide what you spent on it by those jobs. That's cost per booked job, and it's the number to compare. Clicks, leads and profile views come before it and can mislead: a cheap lead that never books costs more than an expensive one that does.

What to set up:

• Call tracking so each source's calls are counted, including missed ones.
• A source on every lead in your CRM, plus "How did you hear about us?" on every call. That's the core of lead attribution.
• Your conversion rate for calls and forms, so you know whether the website is the weak link.
• Know what each report counts. Google's Business Profile "Calls" figure is "the number of times a customer clicked on the call button," not the number of calls answered or booked.

Review it every quarter. Keep sources that book jobs under your ceiling, fix or pause the rest, and move money with the season. If you work with an agency, ask how they'll show you which work led to calls. Owner reviews we collected include complaints about generic monthly reports that never showed which work brought in jobs.

The costliest mistakes are spreading a small budget across too many channels, buying more leads than you can answer, and judging sources by cost per lead instead of booked jobs. Others: mixing up a fee with ad spend, cutting everything the moment work slows, and never checking whether calls are tracked at all.

• Too many channels at once. A little in each means none gets enough to learn from. Fund one or two properly.
• Leads you can't answer. On shared leads, the first pro to call back has the edge. Missed calls are paid for and lost.
• Cost per lead as the scorecard. Track cost per booked job by source.
• Fee versus spend. Ask every vendor for the total monthly cost, including ad spend and setup.
• Cutting blind. The SBA's 2019 post warns of a "chicken-and-egg situation": sales drop, you cut marketing, and sales fall further. Cut what your numbers show isn't booking jobs, not everything at once.

Mindflow sells one program for home-service and contracting businesses: SEO with AI search optimization included, your Google Business Profile, reviews and conversion improvement. Complete Local starts at $2,800 a month, Complete Regional at $4,500 and Complete Multi-Market at $8,500. Ad spend, a new website and your own CRM sit outside the fee.

All plans and what's in them are on our pricing page.

The first 90 days are committed and billed monthly. After that it's month to month with 30 days' notice. No setup fee. You own every account. When paid ads fit your market and goals, we scope Google Ads, Local Services Ads or ChatGPT ads in your proposal; ad spend is paid to the platform and isn't part of our fee. A Website Build is a separate project, from $5,000. We don't guarantee leads, rankings or placement in AI answers.

If you'd rather run the work yourself, the Audit & Roadmap is $1,500 for one metro or $2,500 for more than one metro or location: "A full audit and a 90-day plan you can run yourself or hand to us."

How much should a plumbing company spend on marketing? No public source we found breaks marketing spend out for plumbers. IRS data group all specialty trade contractors together: those filing as sole proprietors reported advertising of about 0.6% of receipts in 2023. Set your number from the extra jobs you can handle and your profit per job, then compare plumbing ad costs in your own market before you commit.

Is 10% of revenue too much to spend on marketing? It depends on your margin and how fast you want to grow. The 10% figure comes from an agency's recommendation for businesses chasing growth, calculated on the revenue you want, not on what you earn now. If your profit per job can't cover the cost per booked job that spend produces, it's too much, whatever the percentage.

What will a home-service marketing budget look like in 2026? We don't have a primary source that forecasts 2026 budgets for home-service businesses, so we won't guess one. What you can control is the method: start from the jobs you need, fund each channel enough to learn from it, and review cost per booked job each quarter.

Does my marketing budget include the agency's fee? Yes. Count fees, ad spend, lead fees, tools and your own time, or every job looks cheaper than it was. Keep fees and ad spend on separate lines, though: a fee pays for work, ad spend pays the platform. Ask every vendor for the total monthly cost, including setup and ad spend.

Should I cut marketing in the slow season? Not across the board. Lower paid spend when demand drops, and keep the owned work going: reviews, your Business Profile and your site keep working through quiet months. Our research found the busiest month moved year to year in every trade we measured, so watch your own calls rather than a fixed calendar date.

Read October 29, 2026.

• IRS, Instructions for Schedule C (Form 1040), principal business activity codes (2025)
• IRS Statistics of Income, Nonfarm Sole Proprietorship Statistics, Table 2, tax years 2019–2023 (2023 table released March 2026)
• U.S. Small Business Administration, How to Get the Most From Your Marketing Budget (July 9, 2019)
• U.S. Small Business Administration community blog, How to Set a Marketing Budget that Fits your Business Goals and Provides a High Return on Investment (June 4, 2012; archived copy)
• ACCA HVAC Blog, Smart spending: How to allocate your 2026 marketing budget for maximum ROI (December 2, 2025)
• Nielsen Norman Group, Participation Inequality: The 90-9-1 Rule (October 8, 2006)
• U.S. Chamber of Commerce CO—, How to create a successful direct mail campaign (March 29, 2021)
• Google Local Services Ads Help, How bidding works for Local Services Ads
• Google Local Services Ads Help, How leads work
• Google Ads Help, About cost-per-click bidding
• Google Business Profile Help, Get started with Google Business Profile
• Google Business Profile Help, Understand your Business Profile performance
• Search Console Help, About Search Console
• Angi, Opportunities and Leads: Frequently Asked Questions
• Thumbtack, Thumbtack for Pros
• Mindflow, When home-service demand peaks (searches October 2022 to September 2026); pricing (Atlanta click estimates pulled October 20, 2026); owner comments collected from contractor forums and review sites

Want to know where your marketing money would do the most before you set the budget? Get a free AI Visibility Review.