“How much should we spend on Facebook ads?” is one of the most common questions small business owners ask. The honest answer is that there is no single right number. But there is a right way to work it out, and there are clear signs that a budget is too small to learn anything useful.
This guide explains how Facebook and Instagram advertising budgets work, how to set a sensible starting point for your business, how long to test before judging results and the mistakes that waste money most often.
Start with what a customer is worth
Before picking a daily budget, work out what a new customer is worth to your business. Consider the profit on a typical first sale, how often customers come back and how many enquiries you need to win one job.
For example, a hypothetical landscaping business might find that one in four enquiries becomes a job and that an average job makes $1,500 in profit. In that case, paying up to $100 or so per enquiry could still be worthwhile. A café selling $12 lunches has very different numbers. Your budget should follow your numbers, not someone else’s.
Why very small budgets struggle
Meta’s advertising system needs data to work out who is most likely to respond to your ads. When an ad set starts, or after a significant change, it goes through a learning phase. Meta’s guidance is that an ad set generally needs around 50 optimisation events, such as leads or purchases, within about a week of its last significant edit to leave that phase.
That is where small budgets run into trouble. If each lead costs $30, reaching 50 leads in a week would mean spending around $1,500 that week. Many small businesses can’t do that, and that’s fine. It just means you should plan around it:
- Use fewer ad sets so the budget isn’t spread thin across many audiences.
- Run tests for longer before drawing conclusions.
- Consider optimising for a more frequent action, such as landing page views, while you build up data, then move to leads once volume allows.
A sensible way to set a starting budget
Rather than picking a figure out of the air, set a test budget you are comfortable spending to learn, not to profit straight away. A simple approach:
- Decide the test length. Two to four weeks is usually a reasonable minimum for a small local campaign.
- Estimate the cost per result. If you have run ads before, use your past numbers. If not, treat your first month as the way to find out.
- Make sure the budget can produce enough results to judge. If the budget could only realistically produce two or three enquiries, the test won’t tell you much either way.
- Keep the budget stable during the test. Large, frequent changes restart the learning process.
Remember to budget for the creative too. Good photos, short videos and clear copy often affect results more than the ad spend itself.
What affects your cost per lead
Two businesses with the same budget can see very different results. The main factors are:
- Your offer. A clear, specific offer, like a free measure and quote, usually performs better than a general “contact us”.
- Your creative. Real photos and short videos of your work tend to stand out more than polished stock images.
- Your audience. Very narrow audiences can be expensive to reach. Very broad ones can waste money if your offer isn’t clear about who it’s for.
- Competition and season. Costs often rise in busy retail periods, when more businesses are advertising.
- What happens after the click. A slow or confusing landing page can make good ads look bad.
Mistakes that waste money
Relying on the “Boost post” button
Boosting a post is quick, but it gives you far less control over the objective, audience and placements than a campaign set up in Ads Manager. For a business that wants enquiries or sales, boosted posts often end up buying likes rather than customers.
No tracking
Without the Meta pixel or conversion tracking set up on your website, the system can’t tell which ads lead to enquiries, and neither can you. Set this up before you spend, and check it is recording correctly.
Changing things too often
Editing ads, audiences or budgets every couple of days keeps campaigns in the learning phase. Make decisions before launch and give the campaign time.
Sending people to the home page
Send ad traffic to a page that matches the ad and makes the next step obvious. Our guide to why websites get visitors but no enquiries covers what that page needs.
Judging on the wrong numbers
Clicks and reach are easy to report, but they don’t pay the bills. Track the cost per enquiry and, where you can, which enquiries turn into paying customers.
How to judge results
At the end of your test period, look at:
- How many enquiries or sales the ads produced, and the cost of each.
- The quality of those enquiries. Were they in your area and the right fit?
- How many became paying customers, and what they were worth.
If the numbers work, increase the budget gradually rather than doubling it overnight. If they don’t, change one thing at a time, such as the offer or the creative, and test again. For a wider view on measuring social media returns, see our realistic ROI breakdown.
Get help planning your first campaign
Madexify plans and runs Facebook and Instagram advertising for small businesses across Pakenham, Officer, Beaconsfield, Berwick, Narre Warren, Cranbourne, Clyde and Bunyip. We set up tracking, build the campaign around your numbers and report on enquiries, not just clicks. If paid ads aren’t the right fit yet, we will tell you. See our social media marketing services, or contact us to talk about your ad budget.
Sources: Meta Business Help Centre: about the learning phase. Accessed 26 September 2026. Figures in this article are illustrative examples, not typical results.
This article is part of our Online Advertising Guide. Browse all our guides on the guides page.
