If you search this question you will find a hundred answers, and almost all of them are a number someone pulled out of the air. Spend 1,000 dollars a month. Spend 3,000. Spend ten percent of revenue. None of that tells you what will actually work for your business, because none of it knows what a customer is worth to you.
So before any number, start here.
Start from what a customer is worth, not a budget
The only budget that makes sense is one worked back from the value of a job or a sale. You need three numbers of your own:
- Average job or order value. What a new customer is worth the first time they buy.
- Your margin. What is actually left after costs, because you spend out of profit, not revenue.
- Your close rate. Out of ten genuine enquiries, how many turn into paying work.
Put them together and you get the number that matters: what you can afford to pay for one customer. Everything else is built on that.
Worked example. An electrician has an average job of 400 dollars at a 50 percent margin, so 200 dollars of profit per job. They close 1 in 3 enquiries. If they are happy to spend a quarter of that first job profit to win the customer, that is 50 dollars per job, which is roughly 17 dollars per enquiry. Now Google Ads has a target to hit, not a number to hope for.
Then check it against real costs
Once you know what you can afford per enquiry, you can sanity check it against what clicks actually cost. In Australian service industries we typically see costs per click anywhere from about 6 dollars to 22 dollars, depending on the trade and how competitive the area is. Emergency and high value work sits at the top. Not every click becomes an enquiry, so if it takes, say, five to ten clicks to get one call, you can see quickly whether your target cost per enquiry is realistic or whether the maths does not stack up yet.
This is the step most budget advice skips. A 500 dollar a month budget sounds fine until you realise it buys you only a handful of clicks a day in a trade where clicks cost 15 dollars. That is not a campaign, it is a coin toss.
The flip side is just as true: a bigger budget is not automatically the answer either. When we rebuilt Meadowbrook Golf Club's Google Ads, the win did not come from spending more. A tighter structure pulled the cost per click down from 1.10 dollars to 0.82 dollars and sent the clicks to pages built to convert, so the same spend booked more work. The budget was rarely the real lever.
There is a practical floor
Google needs data to improve. Below roughly 20 to 30 dollars a day, most local campaigns never get enough clicks and conversions for the system to learn, so you pay for the learning phase without ever getting out of it. For most local service businesses we start around 30 to 50 dollars a day, prove the cost per job, then scale on results rather than guessing a bigger number up front.
Spend is separate from management, and it is yours
One thing that trips people up: the ad spend and the management fee are two different things. You pay Google directly, on your own card, and a good agency never marks up or touches that spend. The account stays in your name. If you only take one thing from this page, make it that one, because it protects you no matter who runs your ads.
The mistakes that waste the budget
A budget only works if the rest of the setup does. The three we see drain money the fastest:
- Spreading too thin. Ten keywords across five campaigns on a small budget gives Google nothing to optimise. Concentrate the spend.
- Judging too early. Clicks arrive on day one, but a fair read takes two to four weeks. Switching things off on day three throws away the data you paid for.
- No conversion tracking. If you cannot see which click became a phone call, you are flying blind and every budget is a guess. This is the first thing we fix, every time. We wrote more on the numbers that actually matter, which is worth a read next.
So, the number
For a local service business in Australia, a sensible starting point is 900 to 1,500 dollars a month in ad spend, run against a clear target cost per job, then scaled up on whatever is producing work. But treat that as a starting point, not the answer. The real answer is the one you work back from your own numbers, and if you get those right, the budget almost sets itself.
Related: Google Ads or Meta Ads: where to start · Google Ads management · Marketing for trades and home services · Free marketing audit