How Much Should a UK Small Business Actually Spend on Google Ads?

It’s the first question almost every client asks me, and the honest answer is: it depends. But that’s not a cop-out — it’s because most people are asking the question backwards. The right number isn’t arbitrary. It’s something you can actually work out.

Why There’s No Single Answer

Anyone who gives you a flat figure — “spend £500 a month” — without understanding your business, your market, and your goals is guessing. Google Ads costs vary enormously depending on your industry, location, competition level, and what you’re trying to achieve. A local tradesperson in Burnley competing for “emergency plumber” will face very different costs per click than a personal injury solicitor in London targeting “no win no fee claims.”

The question isn’t “what should I spend?” The question is “what do I need to spend to hit my targets?” Work from that direction and the number becomes much clearer.

Work Backwards From What You Actually Want

Here’s the logic that every Google Ads budget should be built on:

Start with your target. Say you want 10 new enquiries per month from Google Ads.

Know your conversion rate. On a well-built landing page with a relevant offer, a typical conversion rate for a service business might be 3–5%. If yours is untested, assume 3% to start conservatively.

Estimate your cost per click. Look at Google’s Keyword Planner for your target keywords. Let’s say average CPC is £2.50.

Run the maths:

To get 10 conversions at a 3% conversion rate, you need roughly 333 clicks.
At £2.50 per click: 333 × £2.50 = £833 per month in ad spend.

Now you have a number with reasoning behind it — not a guess. Adjust the conversion rate or CPC estimate and the number changes accordingly. This approach also helps you spot whether Google Ads is viable for your business at all before you commit a penny.

Industry Benchmarks for UK SME Sectors

These are approximate CPC ranges based on typical UK campaigns. Actual costs vary by location, competition, and Quality Score.

Trades and home services (plumbers, electricians, roofers): £1.50–£4.00 per click. Competitive in cities; cheaper in rural areas. Emergency terms cost more. Conversion rates tend to be higher because searchers have urgent need.

Legal services: £5.00–£25.00+ per click. Some of the most expensive keywords in search advertising. Personal injury and conveyancing are particularly competitive. Minimum viable budgets are higher and management needs to be more active to avoid waste.

E-commerce: Hugely variable. £0.30–£3.00 per click is common for Shopping campaigns. Text ad CPCs depend entirely on what you’re selling. ROAS (return on ad spend) is the key metric here rather than cost-per-lead.

Professional services (accountants, consultants, HR, IT support): £2.00–£8.00 per click. B2B terms tend to cost more but the lifetime value per customer is often higher, which changes what a sensible budget looks like.

What’s a Minimum Viable Budget?

Below a certain spend, you simply won’t gather enough data to optimise — or even know whether the campaign is working. As a rough guide:

Trades and local services: £300–£500/month minimum to get meaningful click volume.
Professional services: £400–£700/month.
Legal: £800–£1,500/month minimum to compete on the terms that matter.
E-commerce: Depends entirely on product margins. Below £500/month it’s difficult to test properly across Shopping and Search.

Spending less than these thresholds isn’t necessarily wrong — but you need to go in with eyes open. A £200/month campaign in a competitive market will generate too few clicks to tell you anything useful. You’ll spend months waiting for data that never comes.

The Management Fee Question

Most agencies charge a management fee on top of your ad spend — either a flat monthly fee or a percentage of spend (commonly 10–20%). This is legitimate. Managing Google Ads properly takes time: ongoing keyword work, bid management, ad testing, search term reviews, landing page recommendations.

What’s not acceptable is an agency that bundles everything together so you can’t see how much of your money is going to Google and how much is going to them. You should always know exactly how much is being spent on media.

If an agency won’t tell you your actual ad spend, that’s a red flag. Your Google Ads account should be set up in your name — not theirs. If you ever part ways, you should be able to take that account and its history with you.

When Google Ads Makes Sense — And When It Doesn’t

Google Ads makes sense when:

You have a clear, searchable offer and people are actively looking for it.
You need leads quickly — a new business, a seasonal push, a product launch.
Your margins support the cost per acquisition. If a customer is worth £2,000 to you and you can acquire them for £150, PPC economics work.
You have (or can build) a proper landing page. Running ads to a poor website is pouring money away.

Google Ads is harder to justify when:

You’re selling something people don’t know to search for. Awareness problems need different tactics.
Your average transaction value is low and the margin is thin.
Your website doesn’t convert. Fix the site first, then drive traffic to it.
You can’t afford to run a proper test — three to six months of consistent spend — and measure the results honestly.

Red Flags When Talking to Agencies

Beyond the ad spend transparency issue already mentioned, watch out for:

Guaranteed positions or guaranteed results. Nobody can guarantee Google rankings.
Lock-in contracts over 12 months before they’ve demonstrated any results.
Reports full of impressions and clicks but no conversion data.
An inability to explain the strategy in plain English.
Ownership of your Google Ads account sitting with the agency, not you.

The Bottom Line

There’s no magic number, but there is a right way to arrive at your number — and it starts with what you need the campaign to achieve. Work backwards from your lead targets, understand the CPC landscape in your sector, and make sure any budget you commit is large enough to generate real data. A campaign you can actually learn from is worth ten times a token spend that tells you nothing.

Want help working out the right Google Ads budget for your business? I can run through the numbers with you — get in touch at christaplinassociates.co.uk/#contact.