- Click prices come from the auction, so a sensible budget depends on your trade and your town.
- Work out what a customer is worth, then the most you can pay for a single lead.
- Cover fewer services in a tighter area until the cost per lead works, then expand.
- Expect the early stretch to cost more while waste is found and cut.
- Keep the ad budget and the management fee separate so you can see both.
Why there is no standard number
Click prices are set by the auction, so they depend on who else is bidding for the same searches in the same place, and how good their ads are. An emergency plumber in a big metro is bidding against plenty of companies with deep pockets. A pool builder in a small town might be bidding against two. A personal injury firm and a dog groomer live in different worlds entirely.
Any budget figure you hear without that context is a guess dressed up as advice. That includes rules of thumb about spending a set share of revenue, which ignore how competitive your searches are.
What you can do is build a starting budget from your own numbers, then let the first stretch of real data correct it. The steps below are the same ones a good account manager should walk through with you.
Start from what a customer is worth
Before thinking about Google at all, work out what a new customer is worth to you. Not the first invoice, the realistic value. A water heater replacement is usually one job. A family that joins a dental practice may stay for years. A lawn care client renews every season. A remodeler might get a referral or two from a happy client.
Then decide how much of that value you would happily pay to win the customer. That is your ceiling for cost per customer. Next, look at how many leads it takes you to win one. Your own records answer this: of the last batch of calls and estimate requests, how many became paid work? Put those together and you have the most you can pay for a single lead. That is the number your Google Ads should be judged against, not anyone's industry average.
- What a new customer is worth, counting real repeat business and not hopes
- The most you would pay to win one
- How many leads it takes you to close one
- The most you can pay for a single lead, which follows from the first three
Size the budget to the searches you need to cover
Next, decide what the ads actually have to cover. Every service you add, every town you add and every hour you run spreads the same budget thinner. A budget that does well for one service across your core area can look like it is failing when it is split across eight services and a whole metro.
Google tells you when the budget is too small for the job you gave it. Campaigns show a limited by budget status, and the impression share columns show how often your ads were eligible to appear but did not, because the money ran out for the day. If a campaign is limited by budget and producing leads at a cost you are happy with, that is a reason to add money. If it is limited and producing nothing, narrow it before you feed it more.
Narrow first, then spread
For a local business, the safer start is narrow: your most profitable service, in the area closest to you, during the hours someone answers the phone. An HVAC company might start with AC repair and replacement searches in summer and leave maintenance plans for later. A family law firm might start with divorce and custody searches in its own county. A garage door company might start with spring and opener repair, where people need help now.
Once those campaigns produce leads at a cost you can live with, add the next service or the next town. Give each addition its own budget so a proven campaign is not starved by a new one that is still finding its feet.
This also makes the data easier to read. When one campaign covers one service in one area, you can see exactly what it costs to get that kind of call.
Leave room for learning
The early stretch of any account tends to cost more per lead than it will later. You are paying to learn which searches bring calls, which bring tire kickers, and which bring job seekers. The search terms report fills up, negatives get added, ads get rewritten, and the cost per lead tends to come down as the waste is cut. Nobody can promise how far it comes down.
Smart Bidding adds its own learning. Strategies that bid for conversions need conversion data to work from, and a budget too small to produce a steady flow of conversions gives the system very little to learn from. In that case, manual bidding or a clicks-focused strategy on tight keywords can be the better start, with a move to Smart Bidding once tracked conversions build up.
Treat that learning period as a cost of entry and budget for it. Judging an account on its first few weeks and switching it off is a common way to decide Google Ads does not work, without ever finding out.
How seasons and capacity change the math
Demand moves through the year. Roofers get busy after storms. HVAC calls climb with the first heat wave and the first cold snap. Tax preparers live in the spring. Wedding vendors book far ahead. Your budget should move with your season and with your capacity, because there is no point paying for leads in a month when the crews are already booked out.
The reverse holds too. In a slow month the searches still exist, there are just fewer of them, and the companies that keep showing up get those calls. Running at a lower level through the quiet season also keeps your conversion data flowing, so the account is not starting cold when the rush comes back.
Budget versus management fee
Your ad budget and the cost of managing the account are two different things. The budget goes to Google and is billed to your card. A manager's fee pays for the setup, the tracking, the search terms work, the ad testing and the reporting. Be wary of anyone who quotes one blended monthly number, because you cannot tell how much of it actually reaches Google.
Northward's Google Ads Management is $499 a month on a 30-day agreement, and the ad budget is paid straight to Google with no markup. If you want to run your own numbers through this method with someone, that is a good use of a free consultation.
