How Much Should a Contractor Spend on Marketing? The Honest Math

Short answer first: if your schedule is comfortably full and you just want to stay that way, budget 5 to 8% of your annual revenue for marketing. If you're trying to grow, budget 8 to 15%. If you're brand new or breaking into a new market, plan on the high end of that, because nobody knows you yet.

That's the whole framework. The rest of this article is what those percentages actually look like in dollars, where the money should go first, and how to tell whether it's working, because a budget you can't check is just a hope with a number on it.

Why a Percentage and Not a Dollar Amount

Every contractor wants the dollar answer. "Just tell me, is $1,000 a month enough?" But $1,000 a month is a serious budget for a $200,000 handyman operation and a rounding error for a $3 million remodeling company. The only number that scales with you is a percentage of revenue.

The percentage approach also forces the right mindset: marketing is a cost of doing business, like insurance and fuel, not a treat you buy when the schedule gets thin. The contractors who struggle most are the ones who market in panic bursts. Busy season hits, they cut marketing to zero. Slow season hits, they throw money at anything that promises leads. Then they're surprised the phone rings in waves.

Steady beats clever. A boring $1,500 every month outperforms a frantic $9,000 twice a year, because search rankings, reviews, and referral relationships all compound with time in the market.

The Math at Your Revenue Level

Here's what the framework looks like in real dollars per month:

Two honest notes on that table.

First, if those growth numbers made you wince, you're not alone. Most residential contractors spend well under 5%, which is exactly why the ones who spend properly stand out so fast. When your competitors are all whispering, a normal speaking voice sounds loud.

Second, your first $500 doesn't go where your five-thousandth dollar goes. Order matters more than amount, especially early. We wrote a whole guide on where the first $500 should go, and the short version is: free and cheap foundations first, paid traffic later.

Where the Money Goes, In Order

Think of your marketing budget like framing a house. There's an order, and skipping steps gets expensive.

Step one costs almost nothing: your Google Business Profile and reviews. Before you spend a dollar on ads, your free Google profile needs to be complete, photographed, and stacked with reviews, because that profile is where every other marketing dollar eventually lands. Somebody sees your yard sign, your truck, your ad? They Google you next. If what they find is three reviews and no photos, every dollar upstream just leaked. A systematic review process is the highest-return marketing move in the trades, and it's basically free.

Step two: a website that can close. Not a $15,000 art project. A clean, fast site that loads on a phone, shows real jobs, states your service area, and makes calling you obvious. This is a one-time cost with maintenance, not a monthly burn.

Step three: Google Local Services Ads. For most trades, LSAs are the first paid channel worth turning on, because you pay per lead instead of per click, and you only show up when someone nearby is actively searching for your trade. Industry tracking across hundreds of home-service companies puts the average LSA lead cost around $50 as of early 2026, though it swings by trade and metro, from around $30 in smaller markets to $90+ in competitive ones.

Step four: regular Google ads, and maybe social. Traditional pay-per-click search ads for home services typically run $70 to $90 per lead, and in expensive trades like roofing the non-branded searches can push past $120 per lead. That's not a reason to avoid them. It's a reason to do steps one through three first, so the clicks you pay for land somewhere that converts.

And running underneath all of it: referrals and repeat customers, which cost you a thank-you and a system. If you haven't built a referral system that runs itself, that's budget line zero, because those leads close at a rate paid traffic never will.

Budget Backwards From the Jobs You Want

Percentages are the guardrail. The sharper way to set the number is to work backwards from your revenue goal. The math takes five minutes:

1. Start with the revenue you want to add. Say you want $300,000 more next year.
2. Divide by your average job size. At $15,000 a job, that's 20 more jobs.
3. Divide by your close rate. If you close 1 in 3 estimates, you need 60 more estimates.
4. Divide by your lead-to-estimate rate. If half your leads turn into estimates, you need 120 leads.
5. Multiply by your cost per lead. At a blended $75 a lead, that's about $9,000 for the year, call it $750 a month, aimed at that specific goal.

Run your own numbers and you'll notice something: the levers multiply. Improve your close rate from 1-in-3 to 1-in-2 and the same growth costs 40% less. Sometimes the best marketing spend isn't more leads. It's answering the phone faster and following up on the estimates you already gave.

Adjust for Your Situation

The 5-to-15% range flexes based on three things.

How long you've been around. An established company with 100+ reviews and steady referrals can hold the low end. A newer company is buying attention an established one already owns, so plan on growth-level spend for the first couple of years even just to maintain momentum.

Your trade and ticket size. Big-ticket trades with long sales cycles, remodels, pools, roofs, can justify more per lead because one job carries the month. High-volume, smaller-ticket work needs cheaper leads and leans harder on repeat customers and reviews.

Your market. A three-truck painter in a small metro doesn't need what a roofer in Dallas needs. Competitive metros push lead costs up across the board, which pushes total budgets toward the high end.

What Not to Spend On

A few money pits worth naming, because the budget you protect counts as much as the budget you spend.

• Shared lead platforms that sell the same homeowner to five contractors. You're paying to enter a bidding war with your own competitors. Money spent making your own phone ring is money invested in an asset you keep.
• Boosting random Facebook posts with no offer and no landing page. That's a donation, not a campaign.
• Rebranding as a substitute for reviews. A new logo on a profile with four reviews is a nicer door on an empty house.
• Anything you can't measure. If a vendor can't tell you what a lead costs from their channel, they're telling you it costs too much.

Track Three Numbers or Don't Bother

You don't need a dashboard with forty widgets. You need three numbers, checked monthly:

1. Cost per lead, by channel. Total spent on the channel divided by leads it produced.
2. Cost per job. Total marketing spend divided by jobs closed. This is the number that actually matters.
3. Where each job came from. Ask every single customer "how did you find us" and write it down. Low tech beats no tech.

Give every channel 90 days before you judge it, then be ruthless. Feed what's producing, starve what isn't, and let the percentage rise or fall inside the guardrails based on what the numbers say. That's the entire discipline, and it puts you ahead of most of the industry.

The contractors who win at marketing aren't the ones with the biggest budgets. They're the ones who spend a sane percentage, in the right order, every single month, and actually check whether it worked.