Ad budget calculator
Work backwards: revenue goal ÷ average sale = jobs, ÷ close rate = appointments, ÷ lead-to-appointment rate = leads, × cost per lead = budget. A $200,000 month at $12,000 a job, 30% close and 40% set needs 143 leads — about $10,725 at $75 a lead.
Start with the goal, end with the spend
Revenue you want marketing to produce this month.
Your real average across the last few months, not your best job.
Of appointments that actually happen, how many sign.
Of leads that come in, how many end up on the calendar and attended.
What your channel actually charges you for one enquiry.
That is 5.4% of the revenue goal, and works out at $631 of media per booked job.
Add management fees, CRM and creative on top of this.
About 5 a day, every day, including weekends.
Attended appointments, not slots booked.
Rounded up at every stage, so this lands slightly above the goal.
Same goal, $1,500 less budget. Sales training is usually cheaper than the ad spend it replaces.
Same goal, $1,200 less budget. Faster follow-up moves this number.
How to use this calculator
Enter the revenue you want marketing to produce this month, then the four rates that determine what it takes to get there. The calculator works backwards through the funnel and rounds up at each stage, because you cannot buy two-thirds of a lead and a budget that lands slightly high is a far cheaper mistake than one that lands slightly low.
Use measured rates, not hoped-for ones. Pull the last ninety days out of your CRM: leads in, appointments attended, jobs signed, revenue billed. If you have to guess, guess pessimistically — the four stages compound, so optimism at each one produces a budget that is wrong by a multiple rather than by a margin.
A worked example
A remodeling company wants $200,000 a month from marketing. Average job is $12,000, so they need 17 jobs.
They close 30% of the appointments they sit, so 17 jobs needs 57 attended appointments. 40% of leads become an attended appointment, so 57 appointments needs 143 leads. At $75 a lead that is $10,725 of media — about $353 a day, 5.4% of the revenue goal, and $631 of media behind every booked job.
Now change one number. Lift the close rate from 30% to 35% and the same goal needs 49 appointments, 123 leads, and roughly $9,225 of spend. Five points of close rate is worth about $1,500 a month in budget you no longer have to find — every month, permanently.
Reading the result
- Spend is a low single-digit share of the goal. Comfortable in most trades with a reasonable ticket. There is probably room to raise the goal before the channel runs out of demand.
- Spend is above roughly a tenth of the goal. Check margin before committing. On a thin gross margin that level of acquisition cost can consume the whole profit on the work.
- The lead number is larger than your office can answer. The binding constraint is follow-up, not budget. Buying leads nobody calls back within minutes converts money into no-shows.
- The job number is more than the crews can deliver. Stop. Extra spend here buys backlog, cancellations and bad reviews rather than revenue.
The common mistake
Using the close rate on attended appointments while feeding in a lead-to-appointment rate that counts appointments booked rather than appointments attended. No-shows then vanish from the calculation entirely and the budget comes out badly low. Whichever definition you use, use it consistently: if the close rate is measured on sit-downs, the set rate has to be measured on sit-downs too.
The other mistake is assuming cost per lead holds as spend rises. A local market has a finite number of people searching this month. Once you are capturing most of that demand, additional budget buys worse placements and cost per lead climbs, so a plan built at today rate will under-deliver at three times today spend.
Before you commit, check the ceiling with the max cost per lead calculator, confirm the crews can carry the work with the crew capacity calculator, and measure what actually happened afterwards with the cost per booked job calculator.
Common questions
How do you work out an advertising budget from a revenue goal?
Work backwards through the funnel. Divide the revenue goal by average sale value to get jobs needed, divide jobs by close rate to get appointments needed, divide appointments by the lead-to-appointment rate to get leads needed, then multiply leads by cost per lead. Every stage compounds, so a small drop in close rate raises required spend far more than most owners expect.
Why is working backwards better than setting a percentage of revenue?
A percentage-of-revenue budget is a guess dressed up as a rule. It tells you what to spend without any claim about what that spend will produce, so it cannot be wrong and cannot be useful. Working backwards from a goal forces every assumption into the open — close rate, lead quality, cost per lead — which means when the goal is missed you know which assumption broke.
What is the lead-to-appointment rate?
The share of leads that turn into a booked appointment on the calendar. It is the first real filter in a contractor funnel and it is driven mostly by speed of response and lead quality rather than by sales skill. Renters, out-of-area enquiries and price shoppers all fail here, which is why a cheap lead source often shows a low rate at this stage.
What if the required budget is more than the business can afford?
Then one of three things has to change: the goal, the funnel, or the channel. Lowering the goal is honest. Raising close rate or lead-to-appointment rate lowers required spend without lowering ambition, and usually costs less than the ad budget it saves. Switching to a cheaper lead source only helps if the new leads convert at a similar rate, which they frequently do not.
Should the budget include agency fees?
The number this calculator produces is media spend on leads at the cost per lead you entered. Management fees, CRM subscriptions and creative production sit on top of it. If your cost per lead figure already includes those overheads baked in, the output is a full budget. If it is raw platform cost divided by raw lead count, add the overheads separately before committing to a figure.
How accurate is a budget built this way?
Exactly as accurate as the four rates fed into it. Using last quarter measured numbers produces a plan worth acting on. Using optimistic estimates produces a plan that fails in a specific, predictable way, because the funnel stages compound: an assumed 40% close rate that turns out to be 25% raises the leads needed by roughly sixty percent and the budget with it.
Does more ad spend always produce proportionally more leads?
Not indefinitely. Local service markets have a finite number of people searching for a roof or a furnace in a given month, and once a campaign is capturing most of that demand additional budget buys progressively worse placements and less qualified clicks. Cost per lead rises as spend rises, so a budget calculated at today rate will under-deliver at three times today spend.
What should be done before increasing the budget?
Check that the crew can deliver the work and that the office can work the leads. Buying lead volume a business cannot answer within minutes or schedule within the week converts spend into wasted enquiries and bad reviews. Capacity and follow-up speed are cheaper to fix than ad budget is to increase, and both raise the return on every dollar already being spent.
Keep going
The ceiling on what you can pay per lead before the maths stops working.
Free tool Crew Capacity CalculatorCheck you can actually deliver the jobs this budget is designed to buy.
Free tool Cost Per Booked Job CalculatorMeasure what the spend really produced once the month is over.
A budget is a guess.
A guarantee isn't.
20 qualified appointments in 30 days, guaranteed in writing — so you know what the spend buys before you commit it.
Book a Free Call →