Small Business Guide to Google Ads Budgets

Written By
January 11, 2024

Alright, fellow Canadian entrepreneurs, let's talk about something that's more critical to your business than a steady supply of Tim Hortons coffee - your Google Ads budget. Google Ads can be a game-changer for small businesses looking to level the playing field against the big boys, but getting your budget right can feel like skating uphill if you're new to the game.

In this guide, we're going to tackle all things Google Ads budgets, from understanding how it works to finding that sweet spot that brings you the most bang for your buck. So, sit tight, eh? We're about to take a deep dive.

Understanding How Google Ads Budgets Work

Let's get the basics out of the way first. Google Ads operates on a pay-per-click (PPC) model, meaning you only pay when someone clicks on your ad. So far, so good, right?

But here's where it gets interesting. When you set your Google Ads budget, you're essentially telling Google the maximum amount you're willing to spend each day on your campaign. This daily budget is flexible, allowing Google to optimize your spending based on the ebbs and flows of user traffic.

What does this mean for you? Simply put, some days you might spend less, and others you might spend up to twice your daily limit. But don't worry; you won't end up shelling out more loonies at the end of the month. Google ensures you never spend more than your monthly charging limit, which is calculated as your daily budget multiplied by the average number of days in a month (30.4).

Setting Your Initial Google Ads Budget

Okay, it's time to dip your toes in the water. As a small business, you're probably accustomed to wearing multiple hats and handling various operations with limited resources. And when it comes to Google Ads, it's no different. Your budget might be small, but your dreams are big, right?

As a first step, consider your overall marketing budget. Have a clear understanding of what percentage of that budget you're willing to allocate to Google Ads. Are you relying heavily on Google Ads, or is it just a piece of your grand advertising pie, with other channels like social media, email marketing, or traditional advertising playing significant roles?

Remember, you don't need to break the bank to make an impact. Google Ads can be incredibly effective, even with a small budget. The key is to spend wisely, not abundantly.

Consider starting with a modest daily budget. This way, you can familiarize yourself with the platform, analyze the initial performance, and see the kind of results you can expect. This is your exploratory phase, where you'll learn the ropes and gather the insights necessary to inform your future budgeting decisions.

Also, be aware that the cost of Google Ads can vary greatly depending on your industry and the competitiveness of your chosen keywords. That's why it's crucial to research and have a realistic understanding of what each click could cost you.

Consider this phase as your training wheels period. Start small, monitor closely, learn quickly, and adjust effectively. This gradual approach will not only prevent you from overspending but also help you understand how to make Google Ads work best for your unique business.

Just remember, as we say up north here in Canada - 'It's a marathon, not a sprint.' Give your campaigns time to show results, and don't rush the process. Patience and persistence are key in the world of Google Ads.

Deciding How to Allocate Your Budget

Deciding How to Allocate Your Budget

Now that you've set your budget, it's time to talk allocation. If you're running multiple campaigns (say, one for your handmade candles and another for your DIY soap kits), you'll need to decide how much of your budget to allocate to each campaign.

This is where your business goals come in. Which products or services are most profitable? Which ones align with your current business objectives? Maybe you're trying to push your new line of eco-friendly candles, or perhaps you want to increase sales of your bestselling soaps. Understanding your goals will help guide your budget allocation.

Of course, the market competition for your products should also be taken into account. More competitive keywords will likely require a higher budget to make a significant impact. So, keep that in mind when divvying up your budget pie.

Determining Your Bidding Strategy

Now that you have your budget allocated, how do you decide how much to bid on your keywords? The answer depends on your business goals and the specifics of your industry.

If you're mainly concerned with driving traffic to your website, you might opt for a cost-per-click (CPC) bidding strategy. This means you'll set a maximum bid for how much you're willing to pay for a click on your ad.

On the other hand, if conversions (like online sales or sign-ups) are your main goal, a cost-per-acquisition (CPA) bidding strategy might be more suitable. With CPA, you'll set a target amount you're willing to pay for a conversion, and Google Ads will automatically adjust your bids to try and meet that target.

Take some time to understand the different bidding strategies available and choose the one that aligns best with your business goals. And remember, the beauty of Google Ads is its flexibility - you can always change your bidding strategy down the road if you need to.

Evaluating and Adjusting Your Google Ads Budget

You've done it - your Google Ads campaigns are up and running. It's tempting to sit back, relax, and let Google do its thing, right? But here's the thing about Google Ads, it's not a "set it and forget it" kind of deal. It's more like a high-performance sports car that needs regular fine-tuning to keep it at peak performance.

Regularly reviewing your Google Ads performance is crucial. It allows you to see how your campaigns are doing in real-time. Are they performing as expected? Are you getting a good return on your investment? Are your ads leading to conversions and meeting your set goals?

If you find that your campaigns aren't performing as well as you'd like, it might be time to adjust your budget or make changes to your campaigns. Perhaps you need to allocate more budget to high-performing keywords, or maybe you need to rework your ad copy to make it more compelling.

Keep in mind the key to success with Google Ads is a willingness to experiment and adjust. Tinker with different keywords, refine your targeting, and try different ad formats - the goal is to find what works best for your business and make the most of it. It's all about trial and error, learning from your experiences, and making data-driven decisions. So, remember to keep your toolbox handy because you're in for an exciting ride!

Leveraging Google's Tools to Optimize Your Budget

Google isn't just about search queries and ads, it also provides a suite of tools that can help you get the most out of your Google Ads budget. These tools are like your trusty GPS, guiding you along the route to success.

First up Google's Keyword Planner. This is your go-to tool for researching keywords and getting cost estimates. It can help you discover new keywords, see how they might perform, and understand how much it might cost to run ads on these keywords.

Next, consider the Performance Planner. Think of it as your own digital fortune teller, helping you forecast how changes to your campaigns could impact your results. If you're considering increasing your budget or changing your bidding strategy, the Performance Planner can give you a glimpse into your potential future performance.

And let's not forget the Recommendations page. It's like having a Google Ads expert by your side, giving you tailored advice on how to optimize your campaigns. Whether it's suggesting new keywords, recommending bid adjustments, or identifying underperforming ads, the Recommendations page can provide valuable insights to help you refine your campaigns and optimize your budget.

Remember, making the most out of your Google Ads budget is about more than just setting it and watching it run. It's about using the right tools, regularly evaluating your performance, and making strategic adjustments. It's an ongoing process, but with patience and perseverance, you can ensure that your Google Ads campaigns deliver a strong return on investment. So, gear up, use the tools at your disposal, and start optimizing your Google Ads budget today!


Google Ads can be a powerful tool for small businesses, but getting the most out of it requires careful planning and ongoing management. By understanding how Google Ads budgets work, setting a realistic initial budget, making smart allocation decisions, choosing the right bidding strategy, regularly reviewing and adjusting your budget, and leveraging Google's tools, you can make your Google Ads budget work harder for your business. So go ahead, fellow Canadian entrepreneurs, jump in and start making Google Ads work for you!