How to Set a Google Ads Budget for Small Business
Setting a Google Ads budget without understanding the mechanics means burning money fast. Here's how to calculate a starting budget and control your spend.
2 min read · Updated 2026-05-12
Short answer
Start with a daily budget of £15–£30 and run it for 30 days before making major changes. Your budget should be large enough to get at least 10 clicks per day — anything less gives the algorithm too little data to optimise. Check your cost-per-click estimate before setting the budget.
How Google Ads budgets work
Google Ads runs on a daily budget. You set a maximum daily spend and Google won't exceed 2x that amount on any single day (though it averages to your daily budget over the month).
Example: £20/day budget = up to £40 on a busy day, but no more than £620 over a 31-day month.
Your actual spend depends on:
- How competitive your keywords are (higher competition = higher cost per click)
- How relevant your ads and landing pages are (higher quality score = lower costs)
- How much traffic there is for your keywords
Calculating a starting budget
- Estimate your cost per click (CPC): use Google's Keyword Planner (free inside Google Ads) to see estimated CPC for your target keywords
- Decide how many clicks per day you need: minimum 10 clicks/day for meaningful data
- Calculate: daily budget = CPC × clicks needed
Example: keywords average £2.50 CPC × 10 clicks = £25/day minimum budget
What budget is too small
Below £10/day, the campaign rarely gets enough clicks to learn what's working. You'll burn the budget on learning without generating enough conversions to see patterns. It's better to run a focused campaign on 5 keywords with a £25 budget than a broad campaign on 50 keywords with £10.
Smart budget controls
- Dayparting: run ads only during your business hours or peak buying times
- Geographic limits: restrict to your actual service area
- Negative keywords: exclude terms that waste budget (e.g., add "free" as a negative keyword if you don't offer free services)
- Device bid adjustments: lower bids on mobile if your site doesn't convert well on mobile
Related questions
Free SEO checklist
Grab our free Small Business SEO Checklist — a step-by-step guide to ranking your site higher.