Most budget conversations start from the wrong end: what can we afford this month. The better question is what a customer is worth to you, and what it costs to win one in your market. Once you know those 2 numbers, the budget writes itself, and so does the honest answer about whether Google Ads is the right channel at all.
Start with what a customer is worth
Take your average sale, multiply by how many times a customer buys in a year, and apply your gross margin. That is the most you could spend to win one customer and break even in year one. Most businesses have never written this number down, and it changes every decision that follows.
- Average order or job value
- Purchases per customer per year
- Gross margin after delivery costs
Then what a click costs where you sell
Google will tell you the going rate for your keywords in your city. Divide the customer value by the click cost and you have the conversion rate the landing page has to hit for the maths to work. If that number is above 10%, the page has to be very good, or the channel is wrong for now.
The budget is not a number you pick. It is the output of 3 numbers you already have.
This is why the audit asks about margin before it asks about spend. The account we inherit is usually sized to what felt comfortable, not to what the maths allows, and that is either leaving customers on the table or buying clicks that can never pay back.
