How much should a small business spend on Google Ads?

There is no single right Google Ads budget for a small business. There is, however, a sensible way to work one out, and it starts with the number of enquiries you need rather than a round figure that feels comfortable.

Start from the enquiries you need

Work backwards from your goal using three numbers:

1. How many enquiries you want each month.
2. What share of visitors become an enquiry (your conversion rate).
3. What a click costs for the searches you want to appear for.

Clicks needed = enquiries wanted ÷ conversion rate. Monthly budget = clicks needed × cost per click.

For illustration only: if you want 20 enquiries a month, one in every 20 visitors enquires (5%), and clicks cost around £3, you need 400 clicks, which is roughly £1,200 of ad spend a month. Your own numbers will be different, and the first few weeks of a campaign are how you find them out.

Then check the result against what an enquiry is worth to you. If one customer in four becomes a sale worth £500, each enquiry is worth around £125 in revenue, so a cost per enquiry of £60 may be very profitable. The same £60 could be a loss for a business selling £40 products.

Where to find realistic click costs

Google Ads Keyword Planner shows estimated cost-per-click ranges for the searches you want to target, and you can set the location to Glasgow, Scotland or the UK. Expect estimates rather than exact figures: real costs depend on your competitors, your ad quality and how closely your landing page matches the search.

How Google actually spends your budget

Google Ads budgets are set as an average per day. According to Google’s own help pages, a campaign can spend up to twice its average daily budget on a busy day, but across a month you will not be charged more than 30.4 times the daily figure. So a £40 daily budget means up to about £1,216 a month, with some days higher and some lower.

Give the campaign enough budget to learn

A budget that is too small spread across too many campaigns rarely produces enough clicks or conversions to tell what is working. If your budget is limited:

• Start with one or two campaigns focused on your most profitable service.
• Target the searches closest to buying, such as “emergency plumber Glasgow”, before broader research terms.
• Limit the location and the hours to when and where you can actually take the work.
• Add negative keywords from day one so you do not pay for irrelevant searches.
• Make sure conversion tracking is verified before judging results.

Remember the costs outside the ad account

Ad spend is only part of the picture. You may also be paying for management, landing pages and tracking set-up. For most Glasgow small businesses we see a workable starting ad spend of £500 to £2,000 a month, with management fees typically £400 to £1,500 a month on top depending on complexity. Our PPC management page explains what that covers.

Signs your budget is being wasted

• Your search terms report is full of searches that have nothing to do with your business.
• There is no negative keyword list, or it has not been updated in months.
• Auto-applied recommendations are switched on and nobody reviews what they change.
• Conversions are counted from page views or button clicks rather than real enquiries.
• Ads send everyone to the homepage instead of a page that matches the search.

When to spend more, and when to hold back

Increase the budget when your cost per enquiry is comfortably profitable and your ads are regularly limited by budget. Hold back, or fix things first, when enquiries are not tracked reliably, the landing page converts poorly or most of the spend goes on irrelevant searches. Extra budget makes a well-run campaign better and a poorly run one more expensive.

Google Ads or SEO?

Paid search brings visibility straight away but stops the moment you stop paying. SEO takes months to build but keeps working afterwards. Many small businesses use Google Ads for enquiries now while SEO builds in the background, then rebalance once organic traffic grows. Our digital marketing service plans both together.

Get an honest number

If you already run Google Ads, send us your account for a free PPC audit. We will show you where budget is leaking and what we would change first. If you are starting from scratch, we will give you a realistic starting budget based on your market rather than a one-size-fits-all figure.