01Work backwards from the goal
Most budgets are picked forwards: a number that feels cautious or feels serious, and then hope. The reliable way runs the other way. Start with how many new customers you want, and can actually handle, then let your close rate, conversion rate and click cost tell you what that costs.
The formula is three divisions and a multiplication. Customers divided by close rate gives the leads you need. Leads divided by landing page conversion rate gives the clicks. Clicks times the average cost per click is the budget.
02A worked example
A clearly hypothetical flooring company wants eight new jobs a month. One enquiry in four becomes a job, so it needs 32 leads. One visitor in ten enquires, so it needs 320 clicks. At £8 a click, that is £2,560 a month, or about £84 a day.
If that is more than you can commit, shrink the goal to fit the money. Keeping the goal and cutting the budget means the plan fails by design. The full reasoning, including seasonality and when to scale, is in our guide to how much UK businesses should spend on PPC.
03The too-small-to-measure trap
The second tab answers the opposite question: what does the budget I have actually buy? It is worth running, because the most common budgeting failure is not overspending. It is spending an amount that produces two or three leads a month, where one lucky or unlucky week decides the verdict.
If your budget lands there, concentrate it: one service, one area, your highest-intent searches. Or improve the page first, because every point of conversion rate lowers the budget a goal needs before you spend another pound.
04Monthly and daily budgets
Google Ads budgets are set per day, and Google treats a month as about 30.4 days. On busy days it can spend up to twice the daily budget, balanced by quieter days, so over a month you should not be charged more than 30.4 times the daily figure. Divide the monthly number by 30.4 and set that.
The click cost is the least certain input. Use your own account history if you have it. If you are starting fresh, Keyword Planner's top-of-page bid ranges for your main searches are a reasonable starting point, then replace them with real figures after the first month.