"I want to grow" is not a marketing brief. "I need eleven qualified leads a month at under $80 each, which means about $880 a month in ad spend" is. The second one tells you whether to start, what to spend, and on what date to conclude it is not working.
Here is how to get from the first to the second.
The Four Numbers You Need First
You cannot skip these, and if you do not know them, that is the actual project for this week.
- Your revenue target. The additional revenue you want from marketing, not your total. Be specific and be annual, then divide.
- Your average job value. Total invoiced last year divided by number of jobs. Use the real number, not the one good job you keep telling people about.
- Your close rate on quotes. Of every ten jobs you quote, how many are accepted? Most tradies guess high here. Go and count.
- Your lead-to-quote rate. Of every ten enquiries, how many turn into an actual on-site quote? This is where most of the leakage hides.
The Formula
Work backwards, one division at a time.
Jobs needed = revenue target ÷ average job value
Quotes needed = jobs needed ÷ close rate
Leads needed = quotes needed ÷ lead-to-quote rate
Ad budget = leads needed × cost per lead
Worked example: a concreter
Target an extra $600,000 a year. Average job $20,000. Close rate 40%. Lead-to-quote rate 60%. Cost per lead $70.
- Jobs needed: $600,000 ÷ $20,000 = 30 jobs a year, so 2.5 a month
- Quotes needed: 30 ÷ 0.40 = 75 quotes a year, about 6.3 a month
- Leads needed: 75 ÷ 0.60 = 125 leads a year, about 10.4 a month
- Ad budget: 10.4 × $70 = about $730 a month
So an extra $600,000 in revenue needs roughly eleven qualified leads a month and an ad budget in the region of $730. That is a manageable, testable target, and it is a very different conversation from "how much should I spend on Facebook?"
Worked Examples by Trade
Using typical Australian figures. Substitute your own the moment you have them.
Assumes a 40% close rate and 60% lead-to-quote rate throughout. Notice the pattern: higher job values need dramatically fewer leads. A renovator needs four leads a month to add $720,000. A tiler needs thirteen to add half that. It is the same reason cost per lead is a poor standalone metric, which we covered in how to calculate your cost per lead.
Three Ways This Goes Wrong
You overestimated your close rate
Almost everyone does. Tradies remember the jobs they won and forget the quotes that went quiet. If you assume 60% and the real figure is 30%, your lead requirement doubles and your budget was half what it needed to be. Then paid ads get blamed for a maths error. Count last year's quotes properly before you set a budget.
You forgot you have to deliver the work
Thirty extra concreting jobs a year is roughly two and a half a month on top of what you already do. Have you got the crew? The gear? Can your current team absorb it without the quality slipping and the reviews turning?
This is the failure nobody warns you about. Booking work you cannot deliver is worse than not booking it, because you end up with unhappy customers, bad reviews and a reputation problem that outlasts the revenue. Run the capacity check before the budget.
You averaged away the seasonality
"Eleven leads a month" is an annual average, not a monthly plan. A landscaper does not get eleven identical months. Build the seasonal shape in, especially the lag between marketing and revenue: see why your trade business goes quiet in winter.
The Sanity Check
Once you have a budget figure, test it against the standard benchmark: marketing spend, all in, should sit at roughly 5 to 10% of revenue for a growing trade business.
The concreter above: $730 a month in ad spend plus $2,000 in management is $2,730 a month, or about $32,760 a year, to generate $600,000 in new revenue. That is 5.5%. Comfortably inside the range.
If your calculation puts you at 25% of revenue, something upstream is wrong: your close rate is too low, your job values are too small for paid acquisition, or your target is unrealistic for the budget you have. Do not just spend more and hope. Go back and find the broken number. Our fuller take on this is in how much should tradies spend on marketing.
Then Track It Monthly
Four columns in a spreadsheet, updated on the first of every month: leads received, quotes given, jobs won, revenue booked. That is it.
After three months you will have your real close rate and your real lead-to-quote rate instead of estimates, and you can redo the whole calculation with actual numbers. That is the point at which you stop guessing about marketing and start managing it.
Common Questions
How do I work out how many leads I need per month?
Work backwards from revenue. Divide your revenue target by your average job value to get jobs needed. Divide that by your close rate to get quotes needed. Divide that by your lead-to-quote rate to get leads needed. Multiply by your cost per lead for the ad budget.
What close rate should a tradie assume?
Do not assume, count. Most tradies overestimate because they remember the wins and forget the quotes that went quiet. Typical project-trade close rates on properly qualified leads sit around 30 to 55 percent. If you assume 60 percent and the truth is 30, your lead requirement doubles and your budget will fall short.
How much should a trade business spend on marketing?
All-in marketing spend of roughly 5 to 10 percent of revenue is the standard benchmark for a growing trade business. Use the lead calculation to derive a figure, then sanity-check it against that percentage. If it lands at 25 percent of revenue, a number upstream is wrong rather than the budget being too small.
Why do higher-value trades need fewer leads?
Because each closed job covers far more of the target. A renovator on $60,000 jobs needs around four leads a month to add $720,000 a year. A tiler on $11,000 jobs needs about thirteen to add half that. It is also why cost per lead means little without job value and close rate beside it.
What if I cannot deliver all the work the leads generate?
Reduce the budget rather than the standard of the work. Booking jobs you cannot service produces late starts, unhappy customers and bad reviews that outlast the revenue. Run a capacity check before you set a lead target, and treat the ad budget as a tap you can turn down when the calendar fills.
How long before I know whether the numbers are working?
About three months. Track leads received, quotes given, jobs won and revenue booked each month. After a quarter you have real close and lead-to-quote rates instead of estimates, and you can rerun the whole calculation on actual data rather than assumptions.