What is a fair ad budget for a small business?
ZenDev Project · 18 September 2026 · 1 min read
This question is almost always answered with one number: ten percent of revenue. It is easy to remember, and that is its only advantage.
Why a percentage of revenue misleads
Two shops with the same revenue can afford very different ad budgets. One sells at a 15% margin, the other at 60%. The same percentage makes one reckless and the other too timid — and neither knows which.
Start from margin
Work out what is left from a single sale after goods and shipping. That is the ceiling for acquiring one customer. If you keep Rp40,000 per sale, paying Rp45,000 for a customer is a loss, however busy the ad report looks.
The formula: cost per customer limit = (price − cost − shipping) × 0.5
When to raise the budget
Raise it only after your cost per customer stays below the limit for seven days straight, and raise it by about 20% at a time. Big jumps restart the ad system’s learning, and costs rise before they fall.
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