Google Ads for small business: a realistic monthly budget, worked out from your own numbers
A realistic Google Ads budget is the amount that buys enough clicks to produce a steady number of customers, not a round number. Multiply the customers you want by the leads you need per customer, then by your cost per lead. With WordStream’s 2025 median for home services ($7.85 per click and 7.33% of clicks becoming leads), a lead costs about $107 before any improvement, so a contractor who closes one lead in three needs roughly $1,600 a month for five new customers. Below about $1,000 a month most local campaigns get too few leads to learn from.
Key takeaways
How do you work out a Google Ads budget?
Use four numbers. Three you know or can estimate; the fourth comes from benchmarks until you have your own data.
- Customers you want from Google Ads per month.
- Close rate: of the people who call or fill a form, how many become paying customers. Count from your last 20 or 30 enquiries.
- Conversion rate: the share of clicks that become a call or form. Use the benchmark for your trade until your account has data.
- Cost per click: what Google charges for each click. Use the benchmark, then your own average after a month.
Budget = customers ÷ close rate ÷ conversion rate × cost per click. Our free small business marketing budget calculator does the arithmetic and shows the cost per lead and per customer.
What do clicks and leads cost in your industry?
WordStream by LocaliQ measured 16,446 US search campaigns from April 2024 to March 2025. These are medians across many accounts, a starting point and not a promise; your city, competition and offer move them a lot.
| Industry | Cost per click | Click to lead rate | Cost per lead |
|---|---|---|---|
| All industries | $5.26 | 7.52% | $70.11 |
| Home and home improvement | $7.85 | 7.33% | $90.92 |
| Dentists and dental services | $7.85 | 9.08% | $83.93 |
| Attorneys and legal services | $8.58 | 5.09% | $131.63 |
| Automotive repair, service and parts | $3.90 | 14.67% | $28.50 |
| Beauty and personal care | $5.70 | 7.82% | $60.34 |
| Physicians and surgeons | $5.00 | 11.62% | $56.83 |
| Animals and pets | $3.97 | 13.07% | $31.82 |
| Restaurants and food | $2.05 | 7.09% | $30.27 |
Cost per lead in the table is WordStream’s own median, so it does not always equal cost per click divided by conversion rate.
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A worked example: a renovation contractor
Assumptions, stated: the contractor wants 5 new customers a month from Google Ads, closes 1 in 3 enquiries (33%), and starts with the 2025 home improvement medians: $7.85 per click and 7.33% of clicks becoming a call or form.
Leads needed: 5 ÷ 0.33 = 15 leads. Clicks needed: 15 ÷ 0.0733 = about 205 clicks. Budget: 205 × $7.85 = about $1,610 a month, or about $107 per lead and $320 per customer.
If the average job is worth $6,000, $320 to win one is affordable. If the average job is $300, it is not, and the answer is a different keyword set, a better landing page or a different channel, not a smaller budget spread thinner.
Is there a minimum budget for Google Ads?
Google has no minimum, but there is a practical one. At $300 a month and a $6 click you buy about 50 clicks; at a 7% conversion rate that is 3 or 4 leads. You cannot tell a good keyword from a bad one on 4 leads, and one slow week looks like failure.
Our rule of thumb: plan for at least 15 to 30 leads a month in the first three months, then judge. For most local service trades that means somewhere between $1,000 and $3,000 a month in ad spend. If that is too much, narrow the campaign to your single most profitable service and the area closest to you, rather than running everything at a trickle.
How can the same budget bring more customers?
- Track calls and forms as conversions, so Google’s bidding learns from leads instead of clicks.
- Read the search terms report every week and add negative keywords for jobs, DIY, free and places you do not serve.
- Use the location option “Presence” so you pay only for people in or regularly in your area.
- Send each ad to a page about that service with a tappable phone number, not the homepage.
- Run ads when someone can answer the phone, and call back every form within minutes.
Each of these is covered step by step in our free guide to the 5 Google Ads mistakes small businesses make.
Frequently asked questions
How much should a small business spend on Google Ads per month?
Enough to produce about 15 to 30 leads a month at your cost per lead. For most local service businesses that is roughly $1,000 to $3,000 a month in ad spend, but work it out from your close rate and cost per click rather than picking a number.
Is $500 a month enough for Google Ads?
It can work for a single service in a small area with cheap clicks (for example auto repair at a $3.90 median click), but in expensive trades $500 buys 60 to 70 clicks and only a handful of leads, too few to optimize.
What is a good cost per lead on Google Ads?
One you can afford given your close rate and job value. Divide what a new customer is worth to you (profit, not revenue) by the leads you need per customer; that is your ceiling.
Should the agency fee be part of the budget?
Plan it separately. Ad spend buys clicks; the fee buys the work that makes the clicks convert. Compare total cost per customer with and without the fee.