How Much Should a Home Service Business Spend on Google Ads?

Every week an owner asks us some version of the same question: "What should I be spending on Google Ads?" They usually expect a number. What they actually need is a method, because the right budget for a roofer doing $12,000 replacements is nothing like the right budget for a cleaning company doing $300 jobs.

Here is the method we use on strategy calls. You can run it yourself in ten minutes with a calculator.

Start with what a customer is worth

Everything in paid advertising is a ratio against this one number. Take your average revenue per closed job over the last year. If you do several services, use the one you want more of — the campaign will be built around that service anyway.

Then apply your gross margin on that work. A $12,000 roof at a 35% margin leaves $4,200 to pay for the lead, the salesperson's time and the profit. That $4,200 is the number advertising has to compete with, not the $12,000.

Know what a lead costs in your market

Cost per lead is set by your market, not by your agency. It is a function of how many competitors are bidding on the same searches, how expensive the job is (expensive jobs attract expensive clicks) and how well the landing page converts.

Rough starting points we see for well-run local search campaigns:

Service	Typical cost per qualified lead
Roofing	$150–$250
HVAC	$90–$180
Remodeling	$180–$300
Landscaping / hardscaping	$70–$130
Plumbing	$50–$100
Cleaning / pressure washing	$30–$60

These are ranges, not promises. A new campaign usually starts at the top of the range and works its way down over the first two or three months as negative keywords, ad copy and landing pages are tightened.

Work out your break-even close rate

This is the step most owners skip, and it is the one that decides whether advertising makes sense at all.

Break-even close rate = cost per lead ÷ (average job value × gross margin)

For the roofer: $180 ÷ ($12,000 × 0.35) = 4.3%. Close one lead in twenty and the ads pay for themselves. Close one in four and the campaign is very profitable.

For a cleaning company at a $40 lead and a $300 job with a 50% margin: $40 ÷ $150 = 27%. Still achievable, but now the sales process matters a lot more. Miss two calls in a row and the month turns red.

If your break-even close rate is higher than what your team actually closes today, do not fix it with more ad spend. Fix the follow-up first, or pick a higher-value service to advertise.

Now set the budget

A budget has to be big enough to produce enough leads to learn from. Fewer than fifteen or twenty leads a month and you cannot tell whether a bad week is the campaign or just noise.

So the floor is simple: minimum budget ≈ 20 leads × expected cost per lead. For the roofer that is around $3,600 a month. For the plumber it might be $1,500.

From there, the budget should grow as fast as two things allow:

1. Capacity. If your crews are booked out six weeks, another forty leads a month will just annoy forty homeowners. Scale the ads when you can serve the work.
2. Proven cost per qualified lead. Once the campaign has shown a stable cost per qualified lead for a couple of months, more budget usually buys more leads at a similar cost until you saturate your service area.

What the management fee changes

If you work with an agency, the management fee sits on top of the ad spend. That shifts the break-even math, which is why we think a management fee only makes sense when the ad budget is large enough for the fee to be a minority of the total. Spending $1,000 on ads and $1,500 on management is usually a poor deal for the business; spending $4,000 on ads and $1,500 on management is a very different conversation.

A worked example

A St. George HVAC company wants more system replacements, worth about $7,500 each at a 35% margin. Their market suggests a cost per qualified lead near $120.

• Break-even close rate: $120 ÷ ($7,500 × 0.35) = 4.6%
• Their sales team closes roughly 30% of qualified estimates
• Minimum learning budget: 20 × $120 = $2,400 a month
• At $3,000 a month: ~25 leads, ~7 or 8 replacements, roughly $56,000 in revenue and about $19,000 in gross profit before the ad cost

Those figures are illustrative — they are the inputs the owner gave us run through the arithmetic above, not a result we are reporting. But that is exactly the point: the math is knowable before a dollar is spent. If it does not work on paper, it will not work in the account.

The short version

1. Find your average job value and margin.
2. Estimate the cost per qualified lead for your service in your market.
3. Calculate the break-even close rate and compare it to your real close rate.
4. Budget at least twenty leads' worth a month, then scale with capacity.

If you would like us to run these numbers with you, that is literally what the first half of a strategy call is.