Key takeaways
- Your Google Ads budget is not a guess. Work it out from your cost per click, your conversion rate, and the number of enquiries you need.
- The core sum is simple: target cost per enquiry equals cost per click divided by your landing-page conversion rate. Everything else follows from it.
- Smart Bidding needs data to work. Budget enough to clear roughly 30 conversions a month, or the algorithm never learns properly.
- Cost per click swings hard by sector, from under £2 for estate agents to over £17 for solicitors, so there is no single right budget.
- Without conversion tracking in place first, you are not budgeting, you are guessing. Fix measurement before you raise spend.
There is no fixed price for Google Ads, and anyone who quotes you one before asking about your numbers is guessing. The honest answer is that your budget is set by a short sum: your cost per click, divided by the rate at which clicks turn into enquiries, gives your cost per enquiry. Multiply that by the number of enquiries you want each month, and you have a budget grounded in reality rather than a round number someone liked the look of.
There is a catch, and it is the part most “pick a number” advice skips. Below a certain spend, Google’s bidding never gathers enough data to work, so a budget that is technically affordable can still be too small to succeed. And none of the maths means anything until you are measuring enquiries properly, because the whole calculation rests on knowing your real conversion rate.
So this piece teaches the method rather than quoting you a figure: the sum that sets your budget, a worked UK example, the minimum spend that lets the bidding learn, how all of it shifts by sector, and what each budget tier realistically buys.
The one sum that sets your budget
Your budget comes from your target cost per enquiry, and that is your cost per click divided by your conversion rate. Get those two inputs and the rest is arithmetic.
Here is the logic in order:
- Cost per click (CPC) is what you pay for a single visit from the ad. It is set by your sector and how many others are bidding on the same searches.
- Conversion rate is the share of those clicks that become an enquiry, a call or a form fill, which depends mostly on your landing page and your offer.
- Cost per enquiry is simply CPC divided by conversion rate. If clicks cost £4 and 8% of them enquire, each enquiry costs you £50, because it takes 12.5 clicks on average to get one.
- Monthly budget is your cost per enquiry multiplied by the number of enquiries you want, with a floor applied so the bidding has enough data to learn.
That is the entire framework. A budget is not a figure you choose, it is the output of what an enquiry costs you and how many you need. If you want to put your own CPC and conversion rate in and see the budget fall out, our growth calculator does exactly this sum.
A worked UK example
Run the numbers once and the method sticks. Take a Leicester trades business as an illustration, figures chosen to be realistic rather than from a specific client.
Say the ads bring clicks at £4 each, which sits in the normal band for UK trades. The landing page is decent and turns 8% of those clicks into a genuine enquiry. The sum works out like this:
- Cost per enquiry: £4 divided by 0.08 is £50. Every enquiry costs about £50 in ad spend, from roughly 12 to 13 clicks.
- Enquiries you want: say you can handle and want 20 new enquiries a month. 20 times £50 is £1,000.
- The learning floor: Google’s bidding works best with around 30 conversions a month (more on that next), so 30 times £50 is £1,500, which is the better figure to start on.
So this business is not looking at a vague “few hundred pounds”. It needs roughly £1,000 to £1,500 a month to do the job properly, and it knows precisely what that buys: about 20 to 30 enquiries. Change one input, say the landing page improves to a 12% conversion rate, and the cost per enquiry drops to £33, so the same £1,500 now buys closer to 45 enquiries. That is why we push so hard on the page the clicks land on. It moves the budget maths more than almost anything you can do inside the account.
The “budget to learn”: why a floor exists
Google’s Smart Bidding needs a steady flow of conversions to do its job, so there is a floor beneath which spending is close to wasted. This is the part that catches small budgets out.
Modern Google Ads leans on automated bidding, and Google is clear that it has to be fed. Its own guidance states plainly that “to use Google Ads Smart Bidding, you need to have conversion tracking enabled”, and that you should judge performance over a period “that has at least 30 conversions, such as a month or longer” (Google Ads Help, About Smart Bidding). For Target CPA bidding specifically, Google recommends measuring over “the last 30 days, including at least 30 conversions” (Google Ads Help, About Target CPA bidding).
Read that back in budget terms. If an enquiry costs you £50 and the system wants about 30 a month to settle, then roughly £1,500 a month is not a nice-to-have, it is the point at which the bidding has enough to learn from. Spend much less and you sit in a permanent learning phase, paying for clicks while the algorithm never gets the signal volume to optimise. A tiny budget does not buy a small version of success, it often buys none at all.
This is also why patience matters once you start. The system takes a week or two to learn, longer on low volume, and resetting it with constant changes just restarts the clock. Set a budget that clears the floor, then leave it alone long enough to judge fairly.
How budget changes by sector and competition
The same sum produces wildly different budgets, because cost per click is set by your market, not by you. A solicitor and an estate agent can run identical conversion rates and still need budgets an order of magnitude apart.
UK CPCs vary enormously. A monthly index tracking commercial keywords across 19 UK industries put the overall average at £4.67 in August 2026, but the spread underneath that average is the real story: estate agents around £1.67, electricians £3.39, plumbers £5.34, insurance brokers £6.88, accountants £13.78 and solicitors £17.57 (Peak Digital, UK PPC Index).
Hold the conversion rate steady at our illustrative 8% and feed those real CPCs through the sum, and you can see the budget-to-learn floor move sector by sector:
| Sector | Typical UK CPC | Cost per enquiry at 8% | Budget to clear ~30 enquiries/month |
|---|---|---|---|
| Estate agents | £1.67 | ~£21 | ~£625 |
| Electricians | £3.39 | ~£42 | ~£1,270 |
| Plumbers | £5.34 | ~£67 | ~£2,000 |
| Insurance brokers | £6.88 | ~£86 | ~£2,580 |
| Accountants | £13.78 | ~£172 | ~£5,170 |
| Solicitors | £17.57 | ~£220 | ~£6,590 |
The figures are illustrative, because your conversion rate will not be a flat 8% and your CPCs will differ from any index. But the shape is the point: a solicitor needs roughly ten times an estate agent’s budget to reach the same learning floor, purely because each click costs ten times as much. When someone tells you “£500 a month is plenty” without asking what you do, this table is why that advice is worthless. It is plenty in one sector and nowhere near enough in another.
What each budget tier realistically buys
Think in tiers only after you have done the sum, because the tier you need is simply whatever clears your cost per enquiry at the volume you want. With that caveat, here is what the common bands tend to buy a UK SMB in a low-to-mid-CPC sector.
- Under £500 a month (under about £16 a day). Rarely enough outside the cheapest sectors. You gather too few conversions for the bidding to learn, so you pay the learning tax indefinitely. It can suit a single-location brand-defence campaign or a genuinely low-CPC niche, and little else.
- £500 to £1,500 a month. The realistic starting band for many local service businesses. One tightly focused campaign, a small set of high-intent keywords, one town or city. In lower-CPC sectors this is enough to clear the conversion floor and see what works. UK small-business guides tend to put the practical minimum around £900 to £1,200 a month for the first couple of months for this reason (Aimpro, How much to spend on Google Ads UK).
- £1,500 to £3,000 a month. Where most mid-CPC UK SMBs get a steady flow of enquiries and give the algorithm enough to optimise. Room for a couple of campaigns, some testing, and a wider keyword set or service area.
- £3,000 and up. What high-CPC sectors like legal, finance and competitive trades need just to reach the learning floor, or what growth-minded businesses use to add locations and push volume.
None of these tiers is “right” on its own. The right one is the band that covers your cost per enquiry times the enquiries you actually want, with the learning floor respected. The tiers are a sanity check on the sum, not a substitute for it.
Why none of this works without tracking first
Every number above depends on knowing your real conversion rate, and you cannot know it without conversion tracking. This is the step people skip in their hurry to spend, and it quietly breaks everything that follows.
Two things fall apart without it. First, Smart Bidding simply will not optimise, because, as Google states, conversion tracking has to be enabled for it to function at all. Second, and just as damaging, you have no cost per enquiry to budget against. You will be counting clicks, not customers, and optimising towards whatever is cheapest to click rather than what actually turns into work. We have seen accounts that looked healthy on clicks and traffic while generating almost no real enquiries, because nobody had wired up the one measurement that mattered.
So before you raise a penny of budget, get the measurement right. That means clean conversion tracking on the actions that represent real enquiries, with sensible values attached, which we cover step by step in our guide to Google Ads conversion tracking setup. If you are already spending and are not certain the tracking is sound, a Google Ads audit will tell you quickly whether you are budgeting on real data or on noise.
Where to start
Start with the sum, not the spend. Work out, or estimate honestly, your cost per click and your conversion rate, divide one by the other for your cost per enquiry, and multiply by the enquiries you need. Check the answer clears the roughly 30-conversions-a-month learning floor, and you have a budget you can defend rather than a number you hope is right.
If you would rather have the numbers checked and the account built and run for you, that is what our paid media and Google Ads work is for. We are a Leicester-based growth agency working with UK SMBs, with no long-term lock-in and every pound tied back to a real enquiry rather than a vanity metric. The quickest next step is to book a free growth review, and we will look at your sector, your numbers and your tracking, and tell you honestly what you would need to spend to make Google Ads pay. If you already know you want to talk it through, get in touch.