Setting a first Google Ads budget from your cost per enquiry

Fibvo editorial · 19 March 2026 · 5 min read

Most first budgets start as a round number. The owner of a rooftop solar installer in Jaipur decides that ₹20,000 a month feels safe, splits it across three campaigns and, six weeks later, has a few calls and no idea whether Google Ads works for the business. The figure was never connected to anything. A first budget should come from arithmetic about your own business, and it should be big enough to tell you something.

Start with what an enquiry is worth

Before looking at any Google estimate, work out three figures of your own. Rough numbers are fine at this stage.

• Margin per new customer: what is left after the cost of delivering the job. For a rooftop system that is the installation margin, not the invoice value. Add follow-on income, such as maintenance contracts, only if it reliably follows.
• Close rate: how many enquiries it takes to win one customer. Count from the last few months of real enquiries, whatever their source.
• Acquisition share: how much of that margin you are willing to spend to win a customer. This is a business decision, not a marketing one.

Together these give your affordable cost per enquiry. As an illustration only: if a customer leaves ₹60,000 of margin, you are willing to spend a quarter of it to win them, and one enquiry in eight becomes a customer, you can afford ₹15,000 per customer, or about ₹1,875 per enquiry. Replace every figure with your own.

Work forward to a monthly figure

Next, estimate what an enquiry is likely to cost and compare the two.

• Build a tight keyword list for the services and areas you actually serve, and run it through Keyword Planner. Note the low and high ends of the top-of-page bid range. Treat them as a guide, since real click costs depend on competition, ad quality and when your ads run.
• Estimate how many clicks it takes to produce one enquiry. If your website already turns other visitors into enquiries, use that as a starting point. If not, choose a cautious assumption and plan to replace it with real data within the first month.
• Multiply cost per click by clicks per enquiry to get an estimated cost per enquiry.
• Decide how many enquiries a month you need to judge the channel fairly. With too few, you cannot tell a weak campaign from a slow month.
• Multiply that number of enquiries by the estimated cost per enquiry. That is your monthly budget.

If the estimated cost per enquiry sits well above your affordable figure, do not simply spend less. Narrow instead: fewer services, a smaller area, and only the hours your team can answer the phone.

A budget too small to buy enough enquiries to judge the campaign is not cautious. It is an expensive way to learn nothing.

Learning periods and why thin budgets stall

Automated bid strategies such as Maximise conversions and Target CPA set bids using conversion data. After you launch a campaign, switch bid strategy, change the conversion actions it optimises for or make a large budget change, the bid strategy status can show as learning while it recalibrates. Results are often uneven during this time.

• The system needs conversions to learn from. A budget that buys only a trickle of enquiries gives it little to work with, and learning drags on. One properly funded campaign gathers data faster than three thin ones.
• Significant changes can restart learning. Settle your structure and conversion tracking before launch, then leave the campaign alone long enough to judge it. Move bids and budgets in moderate steps, not large jumps.
• Start simply. A common sequence is Maximise clicks with a maximum cost-per-click limit while tracking is new, or Maximise conversions if tracking already records real enquiries, then Target CPA once conversions arrive steadily. Set the target near what the campaign is already achieving, not the figure you wish for.

How Google spends a daily budget

Google Ads budgets are set as an average daily amount. On a busy day a campaign can spend up to twice that average, and less on quiet days, but over a calendar month you will not be charged more than the daily average multiplied by the average number of days in a month. Set the daily figure as your monthly budget divided by 30.4, and expect daily spend to move around.

In India, GST is added to Google Ads charges, so the amount leaving your bank will be higher than the spend shown in the account. On manual payments, keep the balance topped up. When it runs out, ads stop, and a mid-month gap disrupts the data the campaign is learning from.

When to raise, hold or narrow

Review monthly against the affordable cost per enquiry you set at the start, counting enquiries your team confirms rather than every conversion in the account.

• Raise when cost per enquiry is at or below your affordable figure and the campaign is limited by budget, or the Search lost IS (budget) column shows searches you are missing. Increase in steps and let each one settle.
• Hold when results are close to your figure and still improving. More time is cheaper than a restructure.
• Narrow when cost per enquiry stays well above your figure after the learning period and the landing page has been checked. Drop the weakest services or areas first, rather than cutting the budget evenly across everything.

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Written by Fibvo — Bengaluru and Erode, India — working with clients in other time zones. Questions, or think we have it wrong? Tell us.