How much should a local service business spend on Google Ads?
The honest answer depends on three numbers you already have: your average job value, your close rate, and how many jobs you can actually service next month.
Start from the job, not the budget
Most owners approach this backwards. They pick a number that feels tolerable — say $1,500 a month — and then ask what it will produce. The number that matters is the reverse: what a booked job is worth to you, and what you can afford to pay to get one.
Take your average job value and multiply by your gross margin. A $9,000 roof at 35% margin leaves $3,150. If you are willing to spend 10% of that margin acquiring the job, you can pay $315 per booked job. If your sales team closes one in three qualified leads, you can pay about $105 per lead. That number, not your comfort level, sets your budget.
Then check the auction
Now look at what clicks cost in your market. Home services in a mid-size US market run $8 to $25 per click. Legal runs $40 to $150. If your landing page converts at 8% — a reasonable target for a dedicated page, not a homepage — a $15 click means roughly $190 per lead.
If your math said you can pay $105 and the auction says $190, you do not have a budget problem. You have a conversion problem, a close rate problem, or you are in the wrong channel. That is worth knowing before you spend three months finding out.
The practical floor
Google needs conversion volume to optimize. Below roughly 15 to 30 conversions a month, automated bidding is guessing. For most home service businesses that means $2,000 to $2,500 a month in spend minimum — not because we like bigger budgets, but because below it you are paying for data you never accumulate enough of to use.
If you cannot reach that, put the money into local SEO and Google Business Profile first, or use Local Services Ads where you pay per lead instead of per click. Running a $700/month search campaign for six months is the most common way owners conclude "Google Ads does not work."
What we tell clients
Budget for 90 days, not 30. The seasonal trades are the clearest example — HVAC Google Ads budgets have to move with the forecast, and roofing Google Ads with the storm map. The first month buys data, the second buys structure based on that data, the third is the first honest read on cost per job. Anyone who shows you a win in week two is showing you variance.
And cap your budget by capacity, not ambition. The fastest way to poison a good campaign is to generate more leads than your team can call back within the hour.
The short version
A free audit tells you where your leads are leaking. No deck.