"How much should I spend on Google Ads?" Most businesses answer this by guessing a number. A better approach is to work backwards from the number of leads you need.

Step 1: Decide how many leads you want

Start with a realistic target for the month, for example 30 enquiries. Base it on how many leads your team can handle and how many sales you need.

Step 2: Estimate your conversion rate

Your conversion rate is the share of ad clicks that become an enquiry. It depends on your landing page, offer and industry. If you have no data yet, use a conservative assumption and correct it once real numbers arrive.

Step 3: Find your likely cost per click

Use Google's Keyword Planner to see estimated bid ranges for your main keywords in your area. Use the middle of the range as a starting estimate.

Step 4: Do the maths

The formula is simple:

Monthly budget = target leads ÷ conversion rate × cost per click

For example, if you want 30 leads, expect 5% of clicks to enquire, and clicks cost ₹40, you need 600 clicks (30 ÷ 0.05), which is about ₹24,000 a month (600 × ₹40). Plug in your own numbers; the example is only to show the method.

Step 5: Protect the budget from waste

  • Location: target only areas you serve, set to "presence" (people in the area), not "interest".
  • Negative keywords: block searches like "jobs", "free", "course" or "DIY" if they don't fit.
  • Match types: start with phrase and exact match before broad match.
  • Schedule: run ads when you can actually answer calls.
  • Tracking: set up conversion tracking before launch, or you will optimise blind.

Step 6: Review weekly, scale monthly

Each week, check the search terms report and add negatives. After the first month, compare cost per lead with what a customer is worth to you. If the numbers work, increase the budget gradually.

Common budget mistakes

  • Spreading a small budget across too many keywords and campaigns.
  • Sending clicks to a slow homepage instead of a focused landing page.
  • Judging results after three days.
  • Not tracking phone calls and WhatsApp clicks.

Want a budget plan for your business?

I plan and manage Google Ads campaigns with tracking set up from day one. Book a free consultation and I will calculate a starting budget with you.