It’s the first question almost every business owner asks me, and the honest answer is: it depends on what a customer is worth to you. Here’s how to work out a sensible starting budget without guessing.
Start with what a customer is worth
Before picking a number, answer two questions. How much profit does one new customer bring you? And roughly how many enquiries does it take to win one customer? If a customer brings you 500 in profit and you close one in every four enquiries, each enquiry is worth about 125 to you. That’s the most you could pay for a lead and still break even.
Check what clicks cost in your market
Google’s Keyword Planner shows the typical cost per click for the searches your buyers make. Some industries pay a few cents a click, others pay several dollars. Multiply that by the number of clicks you’d reasonably need to get an enquiry, and you’ll see if your numbers work before spending anything.
Give the test enough room
A budget that’s too small teaches you nothing. You want enough clicks each month to see which searches and ads actually bring enquiries. For most small businesses, that means aiming for at least 100 to 200 clicks in the first month, then deciding what to cut and what to push.
Spend where buyers are, not everywhere
The fastest way to waste money is showing ads to people who will never buy. Start with a small set of high-intent searches (people looking for your service right now), your own city or service area, and the hours when you can actually answer the phone. Once those bring enquiries at a good price, widen out.
Track enquiries, not just clicks
Clicks are cheap to buy and easy to celebrate. What matters is how many calls, forms and WhatsApp messages you get, and what each one costs. Set up conversion tracking from day one, or you’ll be judging your ads on the wrong number.
So what should you spend?
Pick a monthly amount you’re comfortable treating as a test for two to three months. Judge it by cost per enquiry, not by how busy the account looks. If each enquiry costs less than it’s worth to you, spend more. If it doesn’t, fix the targeting, ads or landing page before adding budget.
Want a number for your business?
I offer a free audit where I look at your market, what clicks cost in your area, and what a realistic starting budget looks like for you. Book a free audit and I’ll reply within 24 hours.