What percentage of budget should go to an SEO company?
There is no percentage that fits every business, and a figure quoted without knowing yours is a guess. The share that makes sense depends on how much of your business starts with a search, how far along the business is, and how hard your competitors are to outrank. The reliable way to set it is from your own data: find out what share of your inquiries and sales come from organic search, or could, and fund SEO in proportion to that role, then adjust as the evidence comes in.
Two layers of the question
Budgets are decided in two steps. The first is how much of your revenue goes to marketing at all. The second is how that marketing budget is divided among channels such as paid ads, email, content, events, and SEO. The percentage for an SEO company belongs to the second step: of the money already set aside for marketing, how much should go to search. Keeping the steps apart stops the SEO decision from becoming a debate about the whole marketing budget.
What moves the share
Dependence on search is the first factor: if your customers start by searching for what you sell, search is a main route to revenue and deserves a larger share. If most of your business comes from referrals, repeat customers, or direct sales, search matters less and the share should be smaller.
The stage of the business matters as well, since a new business that needs signals quickly may lean on paid channels, which produce data from the day they start running. SEO builds value over a longer period, so its share can grow as the business can afford to wait for returns.
Competition sets the effort required: where established competitors already hold the top results, catching up takes more sustained work, and so a larger allocation; in a quieter market, a smaller one can be enough.
Setting the number from your own data
Start by measuring where inquiries and sales come from today, by channel, for the last year. Organic search’s share of that total is a first indication of the role it plays. Then look at the questions the measurement leaves open. Is organic search already contributing, or is there demand in your market that your site does not yet capture? Is the attribution model giving organic search credit for visits that started a customer’s journey but did not end it? Last-click reporting gives all the credit to the final visit, so it can understate a channel that introduces customers who return through another.
From there, set a share that matches the role search plays or could play, agree what it should produce and by when, and review the split at fixed points, such as each quarter. The percentage is a decision to revisit, not a setting to leave alone.
When a percentage cannot answer the question
A share of a small marketing budget can be too little to buy meaningful SEO work at all, and a share of a large one can exceed what the site can usefully absorb. Check the result of the percentage against the scope of work it would buy, and let the scope, not the percentage, decide when the two disagree.