There's no single right number. The best way to set a Google Ads budget is to work backwards from how many enquiries you want, what a click costs in your industry and area, and how many of those clicks turn into enquiries. For a lot of local businesses, that lands at a starting budget of somewhere around $30 to $50 a day, which you then increase once the ads are bringing in profitable work.
That's the short answer. Here's how to work out the right number for your business, and how to avoid wasting money while you do it.
Work it out backwards
Instead of picking a number that feels comfortable, start with the result you want and work back to the budget. You need three numbers:
- How many enquiries you want each month. Be realistic about how many jobs you can actually take on.
- What a click costs. This depends on your industry and area. Google's Keyword Planner gives you an estimate for free.
- How many clicks turn into an enquiry. A good landing page will usually turn somewhere between 1 in 20 and 1 in 8 visitors into an enquiry.
An example, with made-up but realistic numbers:
Say clicks in your industry cost around $5, and 1 in 10 people who click become an enquiry. That means each enquiry costs about $50.
If you want 20 enquiries a month, you'd need roughly $1,000 a month in ad spend, or about $33 a day.
Then ask the important question: if you won some of those 20 enquiries, would the jobs pay for the ad spend several times over? If the answer is yes, the budget makes sense.
What drives the cost of a click
Two businesses in different industries can spend the same amount and get completely different results. The main things that affect your cost per click are:
- Your industry. High-value services like legal, finance and some trades cost more per click because every customer is worth more.
- Competition in your area. The more businesses bidding on the same searches, the higher the price.
- Your location. Metro areas are usually more competitive than regional ones.
- The quality of your ads and landing page. Google rewards relevant ads and pages with cheaper clicks, so a well-built campaign can genuinely cost less than a messy one.
Why starting too small can backfire
It's tempting to test the waters with $5 or $10 a day. The problem is that in most industries, that only buys a couple of clicks before your ads switch off for the day. You won't get enough data to know what's working, and your ads may disappear by mid-morning when customers are still searching.
A budget that's big enough to run your ads through the day gives you real results to learn from. If money is tight, it's usually better to target fewer services or a smaller area with a proper budget than spread a tiny budget across everything.
Make sure your budget isn't leaking
Before you spend more, make sure the money you're already spending is working. The most common ways budgets get wasted are:
- No conversion tracking. If you can't see which clicks become calls and enquiries, you're guessing.
- Junk searches. Without regular search term cleaning, you end up paying for clicks from people looking for jobs, DIY tips or a completely different service.
- Sending people to your homepage. A landing page built for the service they searched for turns far more clicks into enquiries.
- Showing ads too far away. Location settings that are too broad mean paying for people outside the areas you actually service.
Ad spend vs management fees
When you budget for Google Ads, there are two separate costs. Your ad spend is what you pay Google for clicks. If you use someone to manage your campaigns, there's also a management fee. Ideally your ad spend goes on your own card in your own account, so you can always see exactly where every dollar goes.
When to spend more
Increase your budget when your ads are bringing in enquiries at a cost per lead that works for your business, and your ads are running out of budget before the day is over. That's the sign there's more work available at a profitable price. Increase it in steps, keep an eye on your cost per lead, and keep going while the numbers hold up.
If your Google Business Profile isn't pulling its weight yet, it's worth working on that alongside your ads. Here's why your business might not be showing up on Google Maps.
Not sure what your budget should be?
I build and manage Google Ads campaigns for local businesses, focused on calls and enquiries, not clicks. See how my Google Ads management works, or get a free audit of your current account and I'll show you where your money is going.
Get my free auditFrequently asked questions
Is $10 a day enough for Google Ads?
In most industries it is too little to get meaningful results. It often only buys a couple of clicks before your ads switch off for the day. A smaller area or fewer services with a proper budget usually works better than a tiny budget spread across everything.
What is a good cost per lead?
It depends on what a customer is worth to you. A good cost per lead is one where the jobs you win pay for your ad spend several times over. Work out your average job value and how many enquiries you usually win, and you will know what you can afford to pay.
Can Google spend more than my daily budget?
Yes. On busy days Google can spend up to twice your daily budget, but it balances out over the month so you will not be charged more than your daily budget times the average number of days in a month.
How quickly will I see results?
Your ads can start getting clicks as soon as they are approved. It usually takes a few weeks of data to see which searches and ads bring in the best enquiries, so expect the results to improve as the campaign is refined.