It's the first question almost every owner asks me. The honest answer is "it depends," which is useless on its own. So here's how I actually work it out for a local service business.
Start with what a customer is worth
Before you pick a number, figure out what one new customer is worth to you. Not just the first job. The first job, plus the repeat work, plus the referrals they send you.
A lawn care customer on a weekly plan is worth a lot more than a one-time mow. A med spa client who comes back every few months is worth more than a single visit. A roof might be one big ticket with no repeat at all. Those businesses should not have the same budget.
Here's a simple way to see what you can afford per lead:
- Take the profit from an average first job.
- Figure out how many leads you usually talk to before one books. Say it's three.
- Divide the profit by that number.
That's roughly what you can pay per lead and still break even on the first job. Repeat work and referrals are the upside on top of that.
A realistic daily budget
For most of the local service businesses I work with, ad spend lands somewhere between $25 and $150 a day. That money goes straight to Meta on your own card. It's separate from what you pay anyone to run the ads.
Where you land in that range depends on a few things:
- How big your service area is. A crew covering the whole OKC metro needs more reach than a detailer working one side of town.
- How much work you can take on. There's no point buying 40 leads a week if you can only run 10 estimates.
- How crowded your trade is. Some industries have a lot of businesses bidding for the same people.
- The season. Most service businesses have busy and slow months, and budget should follow demand.
Why too little can cost you more
Meta needs data to learn who to show your ads to. Ad sets go through what Meta calls a learning phase, and Meta's guidance is that an ad set needs about 50 results in a week to get out of it. Most local businesses won't hit that right away, and that's fine.
What isn't fine is spreading a small budget across five or six ad sets. Each one gets a trickle of data, none of them ever settle down, and results stay jumpy. If your budget is small, run fewer ad sets and give each one enough to work with.
Don't judge it in week one
The first few weeks are for testing. Which video gets watched, which offer gets people to reach out, which audience books. Cost per lead tends to bounce around early. I look at trends over a few weeks, not a single good or bad day.
I wrote more about this in your first 90 days of Facebook ads.
Ad spend is only half of it
The same budget can get very different results depending on what happens after someone clicks. A slow page, or a lead that waits a day for a callback, makes every dollar you spend worth less.
Before you raise your budget, check these first:
- Your ads show real footage of your business, not stock photos.
- The click goes to a focused landing page, not your homepage.
- Every lead gets an answer in minutes, not hours.
Fix those, and more budget actually turns into more booked jobs.
How I set budgets with clients
On a strategy call we work backwards. How many jobs do you want a month? How many leads does it take to get one? What can you afford to pay per lead? That gives us a starting daily budget. Then we adjust it based on real numbers instead of guesses.
If you want help working out the right number for your business, book a free strategy call. You can also read how I run Facebook and Instagram ads for local businesses.