How Much Should a Small Business Spend on Google Ads Per Month?
There's no universal Google Ads budget, but there is a way to calculate yours in about five minutes. It works backwards from what a customer is worth to you rather than forwards from what you feel comfortable spending.
Start with your average job value and your close rate. If a job is worth £1,200 and you win one in three quotes, each quote request is worth £400 to your business. That's your ceiling for cost per lead, you'd obviously like to pay far less, but anything under it is profitable.
Next, estimate clicks per lead. A decent landing page for a local service converts somewhere between 5% and 12% of ad clicks into enquiries. At 8%, you need roughly twelve clicks per lead. Multiply by your cost per click, say £5 in a mid-competition UK trade, and one lead costs about £60.
Now pick a volume. Ten leads a month at £60 means a £600 monthly budget. That's the honest number. Spending £200 in that scenario buys three leads, which is too few to judge performance or optimise on.
As a general rule for UK small businesses: below £500 a month, Google Ads is hard to make work in competitive trades; £500 to £1,500 is where most local service businesses sit; above that you're usually expanding into more towns or more service lines rather than bidding harder on the same terms.
Protect the budget with negatives and tight geography. Excluding 'jobs', 'salary', 'DIY', 'free' and 'training' searches, and limiting radius to the area you'll actually travel to, routinely cuts wasted spend by a quarter or more.
Track enquiries, not clicks. Without conversion tracking, Google optimises towards traffic rather than customers, and you have no way to tell which keywords earn their place. This is the single highest-return hour of setup work in any account.
Can I run Google Ads on £300 a month?
In a low-competition niche or a small town, yes. In competitive UK trades where clicks cost £5 to £10, £300 buys too few clicks to generate consistent leads.
Should I pause ads in quiet months?
Usually no, restarting resets learning. Reduce the daily budget instead so the account keeps its history and performance data.
How do I know if my ads are profitable?
Compare cost per enquiry against job value multiplied by close rate. If a lead costs less than the value of an average quote request, the account is making money.