Why there are no figures here
For the same month of advertising, a snack shop with a small order value and a renovation firm with a large one can carry budgets an order of magnitude apart. A generic figure misleads both.
More importantly it is a sequencing problem: most people set a budget and then advertise, when the correct order is the reverse. Setting the budget first means deciding how much to spend before knowing what it buys — and if it buys badly you will not notice, because no standard of judgement existed from the start.
The correct order is: work out what a customer is worth, then what you are willing to pay to acquire one, and only then the monthly budget. These three steps follow that order.
Three steps to your number
Step one: how much gross profit does one customer bring
Note this is gross profit, not revenue. A job billed at two hundred that costs one hundred and twenty to deliver leaves eighty. Account for repeat business too: if a new customer returns three times on average, their value is three jobs. One-off trades like renovation or weddings count a single job; food, beauty and clinics must count repeats or the figure is badly understated.
Step two: how much of that profit will you spend to buy a customer
A business judgement with no standard answer. A common approach allows twenty to thirty per cent of gross profit for a new customer — keep eighty, spend twenty buying the next one. Starting out and desperate for traffic you can loosen this, even briefly accepting break-even, because you are buying first customers and first reviews, which carry extra value. But that is a short-term stance only.
Step three: derive the monthly budget
Take the affordable acquisition cost from step two and multiply by how many extra customers you want this month. That is the budget. The second number has to be realistic: can your premises and staff genuinely serve that many more? Customers you cannot serve are not customers. This often produces a much smaller figure than expected, which is good news — it means you are not overspending.
Step one is where the mistake usually happens: most people quote revenue rather than gross profit, size acquisition cost against revenue, and lose money on every sale while the reports look healthy.
Once it is running, what to watch
Deriving a budget is the start. Once money is going out, watch these — and the order matters.
First whether anyone calls, not how many clicks
Plenty of clicks and no contact means the landing page or the terms are wrong, and adding budget only loses money faster. Check this in week one.
Then what a customer actually cost to acquire
Divide this month’s ad spend by customers who actually bought. If that exceeds the ceiling from step two, stop and adjust rather than adding money.
Then which terms work
You will usually find a handful of terms produce most of the sales while the rest ride along. Concentrating budget on the effective few beats raising the overall budget by a wide margin.
Finally times and locations
Local businesses often perform far better in certain hours and a few specific postcodes. Narrowing makes the same money denser — one of the few natural advantages local businesses have.
Common ways money gets wasted
Targeting far too wide an area
A local service advertising across the whole state or country. The most common and most expensive mistake — most clicks come from places you do not serve.
Not excluding irrelevant searches
A premium custom business taking heavy click volume on "cheap" and "free". Those need actively excluding, or you pay daily for people who will never buy.
Ads landing on the home page
Someone searching "Flushing braces" arrives at a corporate home page and has to go hunting. The landing page should address exactly what they searched for.
Nobody answering the phone
The most expensive waste is not click price, it is a ringing phone nobody answers and a message replied to the next day. Fatal in local services, where the customer asks three businesses and the first reply wins.
Questions this article gets
Is a very small budget worth spending?
Yes, but only with a very narrow scope — a few precise terms, only the postcodes you genuinely serve, possibly only during opening hours.
A small budget spread across a wide area appears a handful of times everywhere and measures nothing. Small and narrow produces meaningful data.
When should I raise the budget?
When actual cost per acquired customer sits reliably below your ceiling, and you can serve more customers. Missing either condition means do not raise it.
How do I split budget between ads and organic?
It depends on whether you can wait. Needing traffic now means leaning on ads while spending part of the budget on long-term organic; an established business usually reverses that. For sequencing, see ads or organic ranking first.
What does hiring someone to run it cost on top?
The trade commonly charges a percentage of ad spend as a management fee, or a flat monthly fee. Either is fine; what matters is asking whether the full ad spend goes to the platform on top of the fee, whether the account is in your name, and whether monthly reports include sales rather than only clicks. Account ownership matters most — see whose name are the accounts in.
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