Marketing · guide
Setting a Google Ads Budget That Isn't a Guess
How to work backwards from your average job value to a daily budget, and what to do in the first 30 days.
Most small businesses set a Google Ads budget by picking a round number they can tolerate losing. That works as a risk decision and fails as a marketing decision, because a budget too small to buy enough clicks cannot produce enough data to tell you whether the channel works.
Work backwards from one sale
You need four numbers, and you probably already know three of them: average sale value, gross margin percentage, the share of enquiries you win, and the cost per click in your trade. Multiply and divide in that order.
- Gross profit per sale = average sale value × gross margin. A £2,000 job at 40% margin is £800.
- Decide what share of that profit you will pay to acquire the job. Between 10% and 25% is common. At 20%, you can pay £160 per sale.
- Divide by your close rate. If you win one in four quotes, an enquiry is worth £40.
- Divide by the share of clicks that become enquiries. At 5%, you can afford £2 per click.
- Compare with the real cost per click for your keywords. If it is £6, paid search will not work at that margin — change the offer, not the budget.
Minimum viable budget
To learn anything in a month you need roughly 100 clicks per ad group. At £2 a click that is £200 per ad group per month — so a two-service campaign has a floor near £400 a month, not £100. Below the floor, spend the money somewhere else.
Where small budgets get wasted
- Broad match with no negative keyword list, so you pay for people looking for jobs, courses and free advice.
- Sending clicks to the homepage rather than a page about the exact service advertised.
- Running nationwide when you serve three towns.
- Ads running at 2am when nobody answers the phone until eight.
- No conversion tracking, which makes every later decision guesswork.
A sensible first 30 days
| Week | Focus | What to change |
|---|---|---|
| 1 | Tight setup | Exact and phrase match only, one ad group per service, location and hours set |
| 2 | Negatives | Read the search terms report and exclude irrelevant queries daily |
| 3 | Landing pages | Fix the pages with clicks but no enquiries; add price guidance and a phone number |
| 4 | Decide | Compare cost per enquiry to the ceiling you calculated. Scale, fix or stop |
Judge it on cost per enquiry, then cost per sale
Impressions, clicks and click-through rate are diagnostics, not results. The only two numbers that decide whether to continue are cost per qualified enquiry and cost per sale. Ask every caller how they found you for the first three months — the platform's own attribution will overstate its contribution and understate your phone.
Run your own figures through the Google Ads budget calculator in our tools section before you launch a campaign; it applies exactly the arithmetic above and shows the cost per click you can actually afford.
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