How much should a local business actually spend on Google Ads?

Search "how much should I spend on Google Ads" and you'll get the same generic answer everywhere: "5-10% of revenue." It's not wrong, exactly — it's just not useful, because it ignores the one variable that actually determines your budget: how much competition exists for your specific searches, in your specific market.

Why generic percentages don't work

A locksmith in a small town and a cosmetic dentist in a major metro area are not the same budgeting problem. Cost-per-click for "emergency locksmith" might be a few dollars; cost-per-click for "invisalign near me" in a competitive city can be several times that. A flat percentage of revenue tells you nothing about whether that budget will actually buy enough clicks to generate leads.

What actually determines your budget

• Cost per click in your market. This varies enormously by industry and by city — the same service can cost 3-5x more per click in a competitive metro than in a smaller market.
• Your close rate. If you close 1 in 4 leads at a $2,000 average job value, your economics support a much higher cost per lead than a business closing 1 in 20 at a $200 job value.
• How many leads you can actually handle. There's no point in generating more leads than your team can respond to and service well.

A better way to think about it

Instead of starting from a percentage of revenue, start from the math backwards: what's your average job value, what's a realistic close rate, and what cost-per-lead makes the math work. From there, look at actual cost-per-click data for your specific keywords in your specific market to figure out what budget is required to generate a meaningful number of leads at that cost.

This is also why "we got quoted $500/month for ads" and "we got quoted $3,000/month for ads" can both be reasonable — they're solving completely different competitive environments.

Our approach

During a consultation, we look at real auction data for your specific services and area — not a generic formula — and give you a number based on what it would actually take to generate a meaningful volume of leads in your market. Sometimes that's less than you'd expect. Sometimes it's more. Either way, it's based on your actual numbers, not a rule of thumb.

Want a real number for your business? Book a free consultation and we'll walk through it together.