How much should you spend on Google Ads?
Every answer you will find online is a percentage of revenue. That is the wrong direction to calculate from. Start with what a customer is worth to you and work backwards.
Why percentage-of-revenue rules fail
The common advice is to spend between five and ten per cent of revenue on marketing. It is popular because it is easy, and useless because it ignores the two things that actually determine what you can afford: what a customer is worth to you, and how often you close the enquiries you receive.
Two businesses with identical revenue can have wildly different sustainable budgets. A dental practice with a customer worth A$4,000 over five years can pay far more per enquiry than a business selling a single A$400 job, even if both turn over A$2 million a year.
Work backwards from customer value
Start with three numbers you probably already know. First, what an average customer is worth to you in gross profit, not revenue, after materials, subcontractors and direct labour. Second, what proportion of enquiries you convert into customers. Third, what proportion of your acquisition profit you are willing to spend to win the customer.
If a customer is worth A$1,500 in gross profit, you close one in four enquiries, and you are prepared to spend a third of that profit on acquisition, then you can afford A$500 per customer, which is A$125 per enquiry. That is your maximum cost per lead. Everything else follows from it.
Your affordable budget is a consequence of your economics, not a percentage someone published in a blog post.
Turning that into a monthly number
Decide how many additional customers a month you want and can service. Multiply by your affordable cost per customer. That is your starting monthly budget. If you want five extra customers at A$500 each, you need A$2,500 a month in media, before agency fees, which are separate.
The capacity question matters more than people expect. There is no point buying fifteen extra jobs a month if you can deliver eight. Overselling capacity is one of the fastest ways to damage a service business, and it shows up as poor reviews rather than as a marketing problem.
What a realistic floor looks like
Below roughly A$2,000 to A$3,000 a month in media, Google Ads struggles for most service categories in Australian metro markets. Not because the platform requires a minimum, but because you need enough clicks to learn anything. At forty clicks a month you cannot tell a good keyword from a bad one, and you will spend six months guessing.
If your affordable budget lands below that floor, paid search is probably not your first move. Local search visibility, your Google Business Profile, and the conversion rate of the traffic you already get will return more for less.
Where the money actually leaks
Most businesses that feel Google Ads does not work for them have a budget problem second and a measurement problem first. If you cannot attribute booked jobs back to campaigns, you cannot tell which half of the spend is working, so you either cut everything or keep paying for everything.
Before increasing spend, make sure conversions represent real enquiries, that phone calls are tracked, and that your reporting window matches your sales cycle. A fortnight-long close cycle reported on a seven-day window will consistently understate your best campaigns.
A simple test before you commit
Run a single campaign against your highest-margin service, in your best-performing suburbs, pointed at a page built for that one offer. Give it ninety days and enough budget to generate at least sixty clicks a week. Measure cost per booked job, not cost per click.
If the number comes in under your affordable cost per customer, you have a channel worth scaling. If it does not, you have learned that for a defined amount of money, which is a considerably better outcome than a year of ambiguous spend.