This is one of the most common questions we get, and the honest answer is that there isn't a single number that applies to every business. But there is a practical way to think about it.
Start with what a customer is actually worth
Before setting a budget, it's worth knowing your average order value or lifetime customer value, and your margin on that. A business with a £3,000 average deal size and healthy margins can afford a very different cost-per-lead to one selling a £30 product. Budget conversations that skip this step tend to anchor on what feels comfortable to spend, rather than what the numbers can actually support.
You need enough budget to gather real data
Paid advertising is a testing process, and testing needs volume. A budget so small that a campaign only generates a handful of clicks or conversions a week doesn't give the platform's algorithms, or a human managing the account, enough signal to know what's actually working. As a general starting point, we typically recommend businesses have the ability to invest at least £1,500 to £3,000 a month in ad spend before paid media can be optimised properly.
Factor in your sales cycle
A business with a long, considered sales cycle (enterprise software, high-value B2B services) needs to budget for a longer runway before conversion data becomes reliable, since the gap between a click and a closed deal might be months. A business with an instant purchase decision will see meaningful data much faster, and can afford to test and adjust more quickly.
Underspending is its own risk
A budget that's too small to generate meaningful data doesn't just limit growth, it actively wastes what is spent, because there's never enough signal to optimise toward what's working. In some cases, a business is genuinely better off delaying paid advertising until it can commit a budget large enough to learn from, rather than running a campaign that will never produce a clear answer either way.
The honest starting point
Rather than picking a number in isolation, the more useful exercise is working backwards from your margins, your customer value, and how much data you need to make good decisions. That's a conversation worth having before any campaign goes live, not after.