How much should you spend on Google Ads? A budget model for UK small businesses

Write down three numbers: your average order value (AOV) or first-year customer value, your gross margin, and the share of enquiries that become customers (your close rate).

A plumber with a £280 average job, 55% margin and a 40% close rate makes roughly £62 of gross profit per enquiry (280 × 0.55 × 0.40). That is your ceiling for cost per lead before the campaign loses money — and you want to be comfortably under it, not at it.

Now bring in two Google-side numbers: cost per click and landing page conversion rate. In UK service categories, CPCs commonly sit between £1.50 and £8, and a decent landing page converts 5–12% of clicks into enquiries.

At £3.50 a click and an 8% conversion rate, one enquiry costs roughly £44. If you want 20 enquiries a month, you need about £880 in ad spend. Work backwards from the number of jobs you actually want, not from a round number that feels safe.

Local trade (emergency plumbing): £250 job value, £4 CPC, 10% conversion — £40 per lead. A £600/month budget buys around 15 enquiries and roughly 6 jobs. Viable.

Ecommerce (£45 average basket, 30% margin): you have £13.50 of gross profit per sale. At £0.60 CPC and a 2.5% site conversion rate, a sale costs £24 in ads. That campaign loses money until you raise basket size, add upsells or improve conversion rate — no amount of budget fixes it.

B2B services (£9,000 contract, 20% close rate): £1,800 of value per closed deal. Even at £12 CPC and a 4% form conversion rate, a lead costs £300 and a deal costs £1,500. Profitable, but you need three to four months of budget before you can judge it, because the sales cycle is long.

Google's algorithms need conversion volume to learn. Below roughly 15–30 conversions per month per campaign, Smart Bidding is guessing and your data is too noisy to make decisions from.

That gives a practical floor: your monthly budget should buy at least 15 conversions. If it cannot, either narrow the campaign (fewer keywords, tighter geography, exact match) so the same money goes further, or wait until it can. Spreading £300 across five campaigns and three match types is the single most common way small accounts waste money.

Google can spend up to twice your daily budget on any given day and balances it over the month. Advertisers set £30/day, see £58 spent on a Monday, panic, and cut the budget — which resets learning and costs more than the overspend did.

Zevrion forecasts month-end spend continuously and nudges the daily figure by small percentages so you land on the number you planned, instead of running dry on the 22nd or underspending by 30%.

Increase budget when your cost per conversion is comfortably below your ceiling AND your impression share lost to budget is above about 10%. That second number is the signal that says the demand exists and you are simply not showing up for it.

If impression share lost to budget is near zero, extra money will buy you worse clicks, not more good ones. Fix conversion rate or expand keywords first.