1. Start Small, Test, and Scale
For small businesses, you don’t need to spend thousands right away. Instead:
- Initial daily budget: $10–$30/day (≈ $300–$900/month)
- Testing phase: 2–4 weeks to identify winning keywords, ads, and audiences.
- Scale up: Increase by 20–30% weekly once profitable.
💡 Example: In one of Ali Raza’s case studies, a client turned ~$22,000 in ad spend into over $345,000 in sales by gradually scaling after finding profitable keywords.
2. Factors That Determine Your Budget
- Industry CPC (Cost Per Click):
- Low competition: $0.50–$2 (e.g., local services, niche products)
- Medium competition: $2–$5 (e.g., e-commerce, SaaS)
- High competition: $5–$20+ (e.g., legal, finance, insurance)
- Target location: Ads in the US, UK, and Australia cost more than in developing regions.
- Business goals: If you need quick sales, you may need a higher daily budget to gather enough clicks.
3. Budgeting Formula
Here’s a simple way to estimate your starting budget:
pgsqlCopyEditBudget = (Target Conversions × Cost Per Conversion)
Example:
- Goal: 50 leads/month
- Avg. CPC: $2
- Conversion rate: 5%
- Leads needed: 50 → Clicks required: 1,000 (50 ÷ 5%)
- Monthly budget: 1,000 × $2 = $2,000
4. Pro Tips for Budget Optimization
- Use Exact & Phrase Match to control costs.
- Leverage negative keywords to avoid wasting spend.
- Run ad schedules during peak business hours.
- Track conversions in Google Ads & Google Analytics.
- A/B test ad copies every 2 weeks.
5. Recommended Small Business Budget Ranges
| Business Type | Monthly Budget Range |
|---|---|
| Local service provider | $300–$1,000 |
| Small e-commerce store | $500–$3,000 |
| Competitive B2B niche | $1,000–$5,000 |
✅ Key takeaway: Start small, test aggressively, and scale your Google Ads budget based on ROI — just like in Ali Raza’s 156%+ ROI PPC campaigns.