SurrfomanceStart with the outcome, not the budget
The most common mistake we see is a business picking a budget number first — $1,000 a month, say — and then asking what it can buy. That is backwards. The budget is an output of the maths, not an input.
Work it in this order:
- How many new customers do you need per month?
- What percentage of leads do you close? (Most service businesses land between 15% and 35%.)
- Divide customers by close rate to get the number of leads you need.
- Multiply leads by a realistic cost per lead for your category.
A physiotherapy clinic wanting 12 new patients a month, closing 30% of enquiries, needs 40 leads. At $45 per lead that is roughly $1,800 in monthly ad spend.
Realistic cost per lead by category in Ontario
These are broad ranges from campaigns we've run and audited in the Greater Toronto Area. Treat them as a sanity check, not a promise — geography, competition and landing page quality move them significantly.
| Category | Typical cost per lead | Sensible starting budget |
|---|---|---|
| Health & wellness clinics | $25–$70 | $1,200–$2,500/mo |
| Cleaning & home services | $30–$80 | $1,500–$3,000/mo |
| Real estate (buyer/seller leads) | $40–$150 | $2,000–$5,000/mo |
| Accounting & bookkeeping | $50–$120 | $1,500–$3,500/mo |
| Law firms | $90–$400+ | $3,000–$10,000/mo |
The threshold below which Google Ads stops working
There is a floor. Google's automated bidding needs conversion volume to learn from — broadly 15 to 30 conversions per month before smart bidding performs reliably. If your cost per lead is $100 and you're spending $800 a month, you'll generate eight leads, which is not enough signal for the algorithm to optimise against.
In that situation you have three options: narrow the geography until your budget is concentrated enough to compete, switch to manual bidding with tightly controlled exact-match keywords, or use a different channel where reach is cheaper.
Where budgets get wasted
- No negative keyword list. Without one you pay for "jobs", "salary", "free", "DIY" and "how to" searches that will never convert.
- Broad match without conversion data. Broad match works well once the account has signal. On a new account it burns budget discovering what doesn't work.
- City-wide targeting for a local business. A clinic in Mississauga bidding across the whole GTA competes with downtown Toronto budgets and pays their prices.
- Sending traffic to a homepage. A homepage answers "who are you". A landing page answers "should I contact you". They are not interchangeable.
When to increase spend
Scale when your cost per acquisition is comfortably below your customer lifetime value and your close rate is holding steady as volume rises. Increase in 20–30% steps rather than doubling — large jumps reset the learning phase on automated bidding and performance typically dips for one to two weeks.
Frequently asked questions
What is a realistic Google Ads budget for a small business in Ontario?
Most small Ontario businesses run between $1,500 and $5,000 per month on Google Ads. Below roughly $1,000 per month it becomes difficult to gather enough conversion data to optimise in competitive categories like legal, real estate or home services.
How do I calculate my Google Ads budget?
Work backwards from revenue. Multiply the number of new customers you want per month by your cost per acquisition. Cost per acquisition is your cost per lead divided by your close rate.
Why are my Google Ads getting clicks but no leads?
In most cases the landing page, not the campaign, is the problem. Broad keyword match types and missing negative keywords are the second most common cause.