Most small business owners arrive at Google Ads with a number already in their head, usually something like £200 a month, and no idea whether that is sensible or hopeless. It is a fair question with a genuinely useful answer, but almost nobody gives it to you straight.
So here it is. How much a small business should spend on Google Ads depends on three things you can work out in about ten minutes: what a click costs in your trade, how many clicks it takes you to win a job, and what that job is worth. Once you know those, the budget stops being a guess.
This post walks you through that maths with real UK numbers, tells you the floor below which Ads genuinely will not work, and shows you where most small budgets get wasted before they ever reach a customer.
Start with what a click actually costs
The average Google Ads cost per click in the UK sits at roughly £1.95 on the Search network, though that headline number hides a lot. Local trades typically pay somewhere between £1.50 and £3.00 a click, and competitive sectors like legal can run four times higher than ecommerce. If you are advertising in a big city, expect to pay more: London CPCs tend to run 15 to 30 per cent above the national average.
For a plumber, electrician or landscaper working a town like Stirling, Falkirk or Perth, £2 to £3 a click is a reasonable planning figure. That already tells you something useful. At £2.50 a click, a £200 monthly budget buys you about 80 clicks. Spread across a month, that is under three clicks a day.
Is 80 clicks enough? That depends entirely on the next number.
Work out how many clicks it takes to win one job
This is the part people skip, and it is the part that decides everything. Not every click becomes an enquiry, and not every enquiry becomes a job.
Two conversion rates stack up here:
- Click to enquiry. What proportion of people who land on your page actually ring or fill in the form. For a decent local service page, somewhere between 5 and 10 per cent is realistic. A weak page might manage 2 per cent.
- Enquiry to job. What proportion of those enquiries you actually win. Most trades know this one instinctively. Call it 30 to 50 per cent for a business that answers the phone promptly.
Run it through. At £2.50 a click and a 5 per cent enquiry rate, one enquiry costs you 20 clicks, or £50. If you close one in three, a won job has cost you £150 in ad spend.
Now the only question that matters: is a job worth more than £150 to you? For a boiler installation or a bathroom fit, obviously yes, and comfortably. For a £60 call-out, no, and no amount of clever campaign management fixes that.
The realistic minimum, and why going below it fails
The honest floor for Google Ads in the UK is around £500 a month in ad spend. Below that, two things go wrong.
First, volume. At £2.50 a click, £300 a month buys 120 clicks, which at a 5 per cent enquiry rate is six enquiries. Six is not enough to tell a good month from a bad one, so you end up making decisions on noise.
Second, and more importantly, Google’s bidding algorithms need conversion data to optimise. Feed them a handful of conversions a month and they never learn what a good customer looks like for you. Most UK industries find that £1,000 to £2,000 a month is where data accumulates fast enough to make real improvements within 60 to 90 days.
That does not mean you must spend £2,000. It means that if £500 a month is your genuine ceiling, you are better off pointing all of it at your two or three highest-value, highest-intent searches rather than spreading it thinly across everything you do. Depth beats breadth on a small budget, every time.
If a small budget is your reality and you want the compounding option instead, our comparison of SEO vs Google Ads for a small business covers when it makes more sense to build rankings than to rent them.
Where small budgets get wasted
The businesses who tell you Google Ads does not work are usually right about their own experience and wrong about the cause. Four things account for most of it.
Broad match with no negative keywords
Left alone, Google will happily show your “boiler installation” ad to someone searching “boiler installation course” or “how to install a boiler yourself”. You pay for both. Building a negative keyword list is the single cheapest improvement most small accounts can make, and it takes an hour.
Sending every click to the homepage
Someone searching “emergency electrician Stirling” who lands on a homepage listing eleven services has to hunt for what they wanted. A lot of them leave. Matching each ad group to a page about that specific service is unglamorous and it reliably lifts conversion rate.
No conversion tracking
If you cannot see which keywords produced enquiries, you are optimising blind and so is Google. Set up conversion tracking for form submissions and phone calls before you spend a penny, not three months in.
Ads running when nobody answers the phone
If you do not take calls at 9pm, do not pay for clicks at 9pm. Ad scheduling is free and immediately stops a slice of waste.
The budget that fits your business
Rather than picking a round number, work backwards:
- Decide how many extra jobs a month you actually want. Be specific. Five is a target, “more” is not.
- Multiply by your enquiry-to-job rate to get the enquiries you need. Five jobs at a one-in-three close rate means 15 enquiries.
- Multiply by clicks per enquiry. At 5 per cent, 15 enquiries needs 300 clicks.
- Multiply by your cost per click. 300 clicks at £2.50 is £750 a month.
Then sanity-check it against margin. If five extra jobs are worth £6,000 in revenue and cost £750 in ad spend, the maths works and you should probably spend more. If they are worth £900, it does not, and you need either a higher-value service to advertise or a different channel.
Remember that ad spend is not the whole cost. If you use an agency, management sits on top, and so does the work of getting your landing pages fit to convert. A well-managed Google Ads campaign pointed at a page that converts badly is still money down the drain, which is why the site and the campaign have to be sorted together.
Start small, prove it, then scale
The sensible pattern for a small business is not to guess big. Start at a level you can sustain for three months, because one month tells you nothing. Point it at your highest-value service only. Track every enquiry to the keyword that produced it.
After 90 days you will have a real cost per lead and a real cost per job for your business, in your town, at your prices. That number beats every benchmark in this article, including the ones above. Then you scale the spend on what is working and cut what is not.
The businesses that do well with Ads are rarely the ones with the biggest budgets. They are the ones who know their numbers and stop paying for clicks that were never going to become customers. If your website is what is letting the clicks down, our guide to conversion-focused web design covers the fixes that matter most.
FAQs
What is the minimum budget for Google Ads for a small business?
Around £500 a month in ad spend is the realistic floor in the UK. Below that you get too few clicks to judge performance and too few conversions for Google’s bidding to optimise properly. If £500 is your limit, concentrate it on one or two high-value services rather than spreading it across everything you offer, and expect to give it at least three months before judging results.
How much do Google Ads cost per click in the UK?
The UK average is roughly £1.95 per click on the Search network, but it varies widely by sector. Local trades typically pay £1.50 to £3.00, while competitive sectors like legal run considerably higher. Big-city advertising costs more, with London CPCs often 15 to 30 per cent above national averages. Your own cost also depends on Quality Score and how tightly your keywords are targeted.
Is £200 a month enough for Google Ads?
Usually not. At around £2.50 a click, £200 buys roughly 80 clicks a month, which is unlikely to produce enough enquiries to be measurable or profitable for most businesses. If that is your budget, local SEO and a strong Google Business Profile will generally do more for you than a thin ad campaign. Save Ads for when you can commit to a level that generates real data.
How long before Google Ads starts working?
Ads can show within hours of going live, so clicks arrive immediately. Meaningful optimisation takes longer. Expect 60 to 90 days before the account has enough conversion data to bid efficiently and before you can judge cost per lead reliably. Judging performance after two weeks is the most common mistake small advertisers make, and it usually leads to switching things off too early.
Should I spend on Google Ads or SEO first?
If you need enquiries this month, Ads. If you can wait a few months and want traffic that does not cost per click, SEO. Most small businesses do best running Ads for immediate cash flow while building SEO in the background, then reducing ad spend as organic rankings take over volume. The right split depends on your margin, your timeline and how competitive your area is.
Want to know what your number actually is?
Benchmarks get you close, but the only budget worth setting is the one built from your prices, your close rate and your market. Book a free discovery call and we will run those numbers with you, tell you honestly whether Google Ads is the right first move for your business, and if it is not, say so.