The short version
Start from the jobs, not a number
Decide how many booked jobs you need this month, then work backward to the spend that gets you there.
Three inputs set the budget
Jobs you need, your close rate on qualified leads, and the cost per lead in your trade. That is the whole formula.
Search leads run $110 to $230
By trade, on non-branded Google Search. The home-services average across channels is about $91 (LocaliQ, 2025).
Sanity-check against revenue
Total marketing of 7 to 10 percent of revenue is the guardrail (U.S. SBA). If the math blows past it, fix the funnel first.
The budget is a floor, not a ceiling
If the leads book, you spend more, because more spend buys more jobs. If they do not, you stop and fix the leak.
Most contractors set a Google Ads budget by picking a number that feels safe, then wondering why it does not produce. The number is the last thing you decide, not the first.
The one result we can point to. At our own shop the conversion tracking had been broken for six months, so most calls and forms were never counted and we were flying half-blind on spend. We fixed it and rebuilt the campaigns, and qualified leads (real calls and form fills) went from about 10 a month to 58. That 10-to-58 is the only first-party number on this site. Every figure below is sourced public benchmark data, named and dated, never something we are claiming as our own.
Start from the job count, not the budget
A budget pulled out of thin air tells you nothing, because it is not tied to anything you actually need. Flip it around. The right order is:
- How many booked jobs do you need this month? Start with your real target, the number that keeps the crews working and the lights on.
- How many qualified leads does that take? Divide by your close rate. If you book one in three qualified leads, twenty jobs needs about sixty leads.
- What does a lead cost in your trade? Multiply the leads you need by your cost per lead. That is your floor for ad spend.
Three inputs, one number out. You are not guessing anymore, you are sizing the spend to the outcome.
What a lead actually costs
The middle input, cost per lead, is the one most contractors get wrong, so here are the public 2025 to 2026 benchmarks. The home-services average across all channels is about $91 per lead (LocaliQ, 2025). By trade on non-branded Google Search, the ranges run higher:
| Trade | Google Search cost per lead (non-branded) |
|---|---|
| HVAC | ~$130 to $150 |
| Roofing | ~$125 to $230 |
| Plumbing | ~$120 to $185 |
| Electrical | ~$110 to $130 |
These are ranges because cost per lead moves with your market, your trade, and whether the campaign is branded or non-branded. Branded search and Performance Max usually come in lower; the cold, non-branded keywords that bring you strangers cost the most. Local Services Ads, the pay-per-lead channel with the Google Verified badge, generally land cheaper (roughly $45 to $90 per lead by trade), though that figure swings more than search. The two work best together for exactly that reason: one is the cheaper lead, the other reaches people the badge does not.
A worked example
Say you run an HVAC shop and you want 20 booked jobs next month. You close about one in three qualified leads, and a search lead in your trade runs about $140. Here is the math, line by line:
| Step | Number |
|---|---|
| Booked jobs you need | 20 |
| Close rate on qualified leads | ~1 in 3 (33%) |
| Qualified leads required | ~60 |
| Cost per lead (HVAC search) | ~$140 |
| Monthly ad spend (60 x $140) | ~$8,400 |
So roughly $8,400 a month in ad spend to put twenty jobs on the board, if your close rate and lead cost hold. Change any input and the budget moves with it: a better close rate drops the spend, a pricier trade raises it. The formula is the same every time, leads you need, times cost per lead, with your close rate setting how many leads it takes.
Two honest cautions. This is ad spend only; it does not include the fee for the work or your website. And it assumes the leads are qualified and your team actually books at the rate you think. If half your leads are tire-kickers, the real cost per booked job is double what the table says, which is the number that actually matters.
Sanity-check against your revenue
Once you have a spend figure, hold it up against your top line. The U.S. Small Business Administration puts total marketing at 7 to 8 percent of revenue for shops under $5 million, rising toward 12 percent when you are pushing to grow. That figure is fee plus ad spend combined, not ad spend alone, so your Google Ads budget is a slice of it.
| Annual revenue | Total marketing (7 to 10%) | Per month, all in |
|---|---|---|
| $750k | $52k to $75k | $4,400 to $6,300 |
| $1.5M | $105k to $150k | $8,800 to $12,500 |
| $3M | $210k to $300k | $17,500 to $25,000 |
Use this as a guardrail, not the answer. If the spend your job count demands fits comfortably inside that band, you are in the right neighborhood. If it blows past it, that is a signal: either your close rate is too low (fix the sales follow-up), your leads are weak (fix the targeting and the landing page), or your goal is bigger than this channel can carry alone. The budget did not fail, the funnel did, and more spend will not patch it.
The budget is a floor, not a fixed line
Here is the part nobody tells you. The number you just calculated is a starting floor, not a cap you defend all year. Google Ads is a dial, not a switch.
- If the leads book, spend more. When a channel is turning $140 leads into profitable jobs, every extra dollar buys more work. Pulling back to “stay on budget” leaves money on the table.
- If they do not, stop and fix the leak. A channel that produces leads that never close is not a budget problem, it is a funnel problem. Throwing more at it buys more dead leads faster.
That is why we never hand a contractor a flat annual number and walk away. We set the floor from your real job count, watch what each lead turns into, and move the dial based on booked jobs. The spend follows the results, not a spreadsheet decided in January.
Who this is and is not for
This approach is not for a shop that wants the smallest possible ad bill and does not care what it produces. If “spend less” is the only goal, picking a low round number is easier and this method is not for you. If you want the spend sized to the jobs you actually need, with the dial moving on what books, that is how to run it.
Get your number
You can run the formula by hand from the benchmarks above, or skip the arithmetic. Our free budget calculator does the math from your trade, your market, and your monthly lead goal, using the same public benchmarks, and gets you in the right neighborhood before anyone tries to sell you anything. For the full breakdown of what the work, the spend, and the build each cost, the cost pillar lays it all out.
When you want a second read on your own numbers, that is what the free game plan is for. We read your site, your ads, and your top local competitors, then send back a plain report: where your leads are leaking and what each fix is worth in booked jobs. It comes back in a few days, no call unless you want one, and you keep it either way. Bring us on and you walk your finished site before a dollar moves, the scope is in writing, satisfaction is guaranteed on the build, and everything is yours from day one: month to month, walk anytime and keep it all. Get my free game plan.
Sources: LocaliQ 2025 Home Services Search Advertising Benchmarks; U.S. Small Business Administration marketing-budget guidance. Industry ranges are indicative and vary by market, trade, and year.