This is one of the most common questions we get, and the honest answer is: it depends on your margins, your goals, and what a new customer is actually worth to you. Here's how to think it through properly instead of picking a number out of the air.

Start with what a customer is worth

Before setting a budget, know your average customer value and, ideally, their lifetime value if they return or refer others. A $50 service and a $15,000 service justify very different ad budgets, and very different acceptable costs per lead.

Work backward from your goals

If you want 20 new customers a month and your typical close rate from lead to customer is 25%, you need roughly 80 leads. If your average cost per lead in your industry runs $40-60, that puts your rough monthly budget in the $3,200-4,800 range, before management costs. Every industry's numbers differ, but this is the right way to work out a real number.

General starting benchmarks

As a rough starting point, many small local businesses spend somewhere between 5-10% of revenue on marketing overall, split across channels. Businesses in growth mode or entering a new competitive market often spend higher, sometimes 12-20%, to build momentum faster.

Why underspending can waste money too

Below a certain minimum, ad platforms don't have enough data to optimize campaigns effectively, and the account can underperform simply due to being too small to learn from. A too-small budget often produces a worse cost per lead than a properly sized one, not a proportionally smaller good result.

Test small, then scale what works

You don't need to commit to a large budget on day one. Start with an amount you're comfortable testing for 60-90 days, evaluate real results, then scale the budget once you know what's actually working.

The honest answer

There's no universal right number, only a right number for your specific margins, goals, and market. If you want help working out a realistic number for your specific business, that's exactly the kind of thing we cover in a free audit. Book a call and we'll walk through the math with you.