Paid Advertising Budget Calculator

How to use this calculator

1. Enter your annual revenue goal, the number you want next year, not last year’s.
2. Add your average service value, what a typical job is worth once it closes.
3. Set your close rate, the share of qualified leads that become paying customers.
4. Enter your average cost per lead, from Google Ads, Meta Ads, or your current provider.

The calculator returns a monthly and annual advertising budget, plus the lead volume that budget needs to produce.

Why this matters more than the percentage

A budget without a lead target is a guess. If your average job is worth $4,000 and you close one in four leads, each lead is worth about $1,000 to you. That single number tells you what you can afford to pay for a lead, and whether your current campaigns are profitable.

Most businesses we audit in York and Lancaster counties are not spending too much. They are spending without knowing their cost per lead, so they cannot tell a good month from a lucky one.

Where the budget should go

For local service businesses, a sensible starting split is:

• 60–70% paid search, Google Ads and Local Services Ads capture people already searching for your service.
• 20–30% paid social, Meta ads for retargeting, seasonal offers and brand recall.
• 10% testing, new keywords, new creative, new offers. Without this line the account goes stale.

Website and tracking costs sit outside the media budget. If conversion tracking is not installed, the calculator will be more accurate than your ad platform’s reporting.

Frequently asked questions

How do I calculate an advertising budget?

Start with your annual revenue goal, take 10% as the planning figure, then divide by twelve for a monthly budget. Adjust up for competitive markets or aggressive growth targets, and down if your close rate and average job value are unusually high.

What is a good advertising budget for a small business?

Most local service businesses land between 5% and 15% of revenue, with 10% as the common planning number. Businesses in the first two years, or entering a new market, usually sit at the higher end.

How much should I spend on Google Ads?

Enough to capture the searches you can serve, and no more than your cost per acquisition allows. Work backwards from your average job value and close rate: if a lead is worth $1,000 and you close 25%, you can afford several hundred dollars per lead and still be profitable.

How do I calculate cost per lead?

Divide total ad spend by the number of leads it produced in the same period. Count form fills, calls and booked appointments, not clicks or impressions.

Does the 10% rule include my website?

No. The 10% is media and campaign spend. Website build, hosting and ongoing SEO are separate investments, which is why we scope them separately in the Digital Uplift.

Next step

If the number surprises you, that is useful. We can pressure-test it against your actual campaigns and show you where the budget is leaking.

• See how our paid advertising programs work
• Read what changed for other York County businesses
• Book a Game Plan Call

What counts as “advertising budget”

Your budget is the media spend that buys attention: Google Ads, Local Services Ads, Meta, TikTok, display and retargeting. It does not include your website, hosting, photography, or the retainer for someone to manage the account. Those are separate investments, and mixing them is the fastest way to misjudge whether advertising is working.

One more distinction matters: media spend is what the platform charges; cost per lead is media spend divided by leads; cost per acquisition is media spend divided by booked jobs. The calculator estimates the first. Only your tracking can tell you the other two.

A worked example

Suppose your revenue goal is $1,000,000. A 10% planning figure gives you $100,000 a year, or about $8,333 a month. If your average job is $5,000 and you close one in four leads, each lead is worth $1,250 to you. At a $250 cost per lead, that is a 5:1 return before overhead, healthy. At $900 per lead, the math stops working and the offer, targeting or close rate has to change.

Run your own numbers above, then compare the result with what you are actually spending. The gap is the conversation worth having.

Common budgeting mistakes

• Setting the budget from last month’s bank balance rather than from a revenue target.
• Counting clicks as leads. A click is not a conversation, a form fill, or a booked job.
• Spreading spend evenly across months when your trade is seasonal. Landscaping and HVAC should not spend like it is June in January.
• Stopping at the first expensive month. Paid search needs enough data to optimize; most accounts need 60–90 days before the numbers are trustworthy.
• Running ads to a page that cannot convert. No budget survives a weak landing page.

How to split the budget across channels

Local service businesses usually get the best return from search first, because the person is already looking for the service. A practical starting point:

• Search (Google Ads / LSA): 60–70% of media spend. Highest intent, fastest feedback.
• Social (Meta): 20–30%. Retargeting, seasonal offers and keeping the brand in front of people who did not convert.
• Testing: 10%. New keywords, new creative, new offers. Without it the account slowly stops improving.

If you serve multiple counties, split by geography inside each channel rather than running one campaign across all of them. It is the only way to see which market actually pays.