How much should a small business spend on Google Ads?

“How much should I spend on Google Ads?” has no single answer, and anyone who gives you a round number without asking about your business is guessing. What I can give you is a way to work it out, so you spend enough to learn something and not so much that a mistake hurts.

Start with what a customer is worth

Work out what a new customer is worth to you over time, not just the first sale. If a customer is worth a few hundred pounds in profit, you can afford to pay a sensible amount to win one. If a customer is worth very little, ads may never pay for themselves, and it is better to know that before you start.

Know your numbers

You need three rough figures.

• Profit per customer after your costs.
• How many enquiries become customers. If one in three does, you need three enquiries per customer.
• What you can pay per enquiry and still make money.

Multiply what you can pay per enquiry by the number of enquiries you want, and you have a monthly budget grounded in your business, not in a guess.

Budget enough to learn

A very small budget on a competitive search will barely get a click, and it takes a long time to learn anything from it. A budget that is too thin to learn from is the most common way small businesses decide that ads do not work. It is better to run a focused campaign on a few valuable searches than a tiny spread across lots of them.

Start narrow, then widen

Begin with the searches closest to buying: the exact service, in the exact area. Add more only once those are working. Exclude searches that are clearly not for you, such as jobs, free or DIY, with negative keywords, so your budget does not leak.

Track what matters

Clicks are not the goal. Set up conversion tracking for calls, form submissions and bookings, so you can see the real cost per enquiry. Without it, you are judging the budget on vanity numbers. If tracking is not set up properly, fix that before you spend more.

Give it time, but not forever

Campaigns need a little time to learn, so do not change everything after three days. But if after a sensible test the cost per enquiry does not make sense, change the targeting, the ads or the page they land on, or stop. Treat it as a test with a clear question.

Google or Meta?

Google Ads catches people who are searching for what you do right now. Meta ads reach people while they scroll, before they have decided. Which fits depends on your business. Our guide to Google Ads or Meta Ads explains the difference.

Keep ad spend and management separate

The budget goes to Google. Management is the time spent setting up, checking and improving. Keep the two clear so you know what each is for. If you would like help, read about how I manage ads or get in touch.