The basic equation
Budget = customers needed × acceptable cost to acquire one. The acceptable cost comes from your margin and how often a customer buys again.
Example
A training center earns 800 from each trainee and accepts spending 200 to win one. It wants 30 trainees a month, so the starting ad budget is about 6,000, reviewed after the first month based on the real cost.
Don’t forget what surrounds the ads
- Content production: photos, video, design.
- Tools and subscriptions.
- Website or landing page improvements.
- Response time; a good ad is wasted on a slow reply.
When to increase the budget
When cost per customer is stable and acceptable and you can serve more. Increase gradually and watch that the cost doesn’t rise sharply as you scale.