Sarafan

How much ad budget you need to start

Not "whatever you can spare", but enough to get an answer. How to work out the minimum from your cost per lead, and when to add more.

3 min read

Where the minimum comes from A starting budget is not about scale, it is about being able to draw a conclusion. Three leads in a month tell you nothing: three is luck. Thirty give you a cost per lead, a reach rate and a clear view of whether this pays. So the minimum is roughly the expected cost per lead in your category times 25 to 30. # Estimating the cost per lead You will only learn the exact number with your own money, but you can size it: - Lower ticket services with wide demand: leads are usually inexpensive. - Narrow, high ticket services with competition in search: noticeably more expensive. - The tighter the geography, the higher the cost per impression, but the higher the share of people who can actually reach you. Sensible approach: take a pessimistic and an optimistic estimate and plan on the pessimistic one. # The ceiling: what you can afford The second boundary comes from your own economics. Work out what a customer is worth over a year and how many leads it takes to get one. Divide, and you have the maximum you can pay for a lead. If the minimum test budget is more than you are willing to lose in the worst case, it is better not to start. Ads switched on with the last available money are usually switched off within a week, and the money is wasted. # What else the budget has to cover A common mistake is counting only the platform spend. At the start you usually also need: - A page for the ads to lead to, if you do not have one. - Photos or short video of your work. Without them the ads look like everyone else's. - The work of whoever sets up and runs the campaigns. If the money only stretches to one of these, choose the page and the shoot: traffic without them burns. # Structuring the first month 1. One platform. Not two. 2. One or two offers, not the whole price list. 3. A steady daily budget, no jumps. 4. Two to four weeks without sharp edits. A month like that produces the thing it is for: clear numbers. # When to add money Add when all three are true at once: - Cost per customer is below your ceiling. - You are keeping up with the leads. - There is capacity to do the work. Break any one of them and a bigger budget just buys bigger problems. Usually it is the second that breaks: more leads arrive, nobody answers, money evaporates. Raise gradually, twenty to thirty percent at a time, and watch whether the cost per lead moves. Doubling overnight almost always gets expensive. # When to cut or stop - Cost per customer is above what a customer is worth, and stays there for more than a month after fixes. - You cannot keep up and are losing leads: fix the response first, restore the budget after. - The season ended: in some categories it is cheaper to wait out the winter. # The short answer Enough to get around thirty leads in a month, and no more than you are prepared to lose if the test fails. Every other number you will produce yourself within a month. On a review call we do this math with you: your industry, your city, your ticket, and the budget range at which a test makes sense.

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