Setting the right Google Ads budget is critical. Too little and you waste money. Too much and you overpay for leads.
One of the most common questions we hear from tradesmen and service businesses is 'How much should I spend on Google Ads?' The answer depends on your industry, location, and competition, but there are solid principles that apply to every business.
Start by understanding your target Cost Per Lead. If a plumber in Manchester closes 1 in 3 leads with an average job value of £300, they can afford to pay up to £100 per lead and still make a healthy profit. Work backwards from your close rate and average job value to find the maximum CPL that makes commercial sense.
For most UK service businesses starting out, we recommend a minimum of £500 per month in ad spend. Below that threshold, you simply don't get enough data to optimise effectively. Google's algorithms need volume to learn which searches are most likely to convert, and a tiny budget starves the machine of learning opportunities.
As a rule of thumb, your monthly ad spend should be 2-5% of your target monthly revenue. If you want to generate £20,000 in monthly revenue from Google Ads, budget £400-1,000 per month in ad spend. Monitor your CPL weekly and increase budget on campaigns that are delivering below your target CPL while cutting those that aren't performing.