FREE CALCULATOR
How much should a small town contractor spend on marketing?
Everyone answers this with a percentage of revenue. That answer says the same thing to a five million dollar contractor in a metro and to a two truck shop in a county of forty thousand. Here is the version that starts with your jobs instead, worked out in your browser, no email and nothing saved.
The percentage rule has no idea how big your town is
Ask what a contractor should spend on marketing and you will be handed a share of revenue, usually somewhere between five and ten percent. It is an easy rule to give because it needs one number from you and it scales by itself. That is also the problem with it. A percentage has no idea how many people live in your service area, so it hands the same instruction to a shop with a hundred vans and a shop with two.
In a town the binding constraint is usually not the budget. Only so many furnaces in your county will fail this winter, only so many driveways will be dug, and no amount of money changes that number. Past the point where you are already reaching most of the people who need the work, more spend does not buy more jobs. It buys the same jobs at a higher price, because you are bidding against yourself for a fixed amount of demand. A percentage rule cannot warn you about that, because it never asked how much demand there was.
The way out is to build the number from the bottom. How many jobs do you need this year that you do not already have. What gross profit does one of those jobs leave you after materials, subs and the labour it consumed. What share of that profit are you willing to hand over to win it. Those three answers give you a marketing budget that came out of your own business, and they give you something a percentage never does, which is a ceiling price per job. Above it, a channel is costing you more than the work is worth. That is the arithmetic below.
What you will get
Fill in what you paid and how many leads it produced and you get your cost per lead. Add the jobs and the gross profit and you get the number that actually decides things: what share of a job's profit you are handing over to win the job, and the most you could pay per lead before the channel stops being worth running.
Every field is empty on purpose. We could have prefilled it with an average lead price, and every one you can find online is an average across trades, job sizes and regions that has nothing to do with your business. Your own statement is the only source worth using.
Why we did not prefill this with average lead prices
Because we would have had to make them up. Every published figure for what a contractor lead costs is an average across trades, job sizes, seasons and parts of the country, and a page that prints one as though it were your number is guessing at your business. The three inputs this asks for are all on statements you already have, and once you have them the answer is arithmetic rather than opinion.
The other reason is that the interesting number is not the lead price at all. Two channels can charge the same per lead and differ by a factor of three per job won, because the close rates are not the same. Nobody selling you leads leads with that.
If your site is the channel you want to measure and it is producing nothing, the reason is usually mechanical rather than mysterious. Our free site check reads your live site and lists what is standing between a search and a phone call, also with no email field. If you would rather read than paste, why your website is not getting calls is the same ground in long form.
Common questions
How much should a small town contractor spend on marketing?
Work it out from the bottom rather than taking a percentage off the top. Decide how many jobs you need this year that you do not already have, work out the gross profit a job of that kind leaves you, and decide what share of that profit you are willing to hand over to win one. Multiply the three together and you have a budget that came from your business. The percentage rules give you a number before anyone has asked what a job is worth to you.
Is the 5 to 10 percent of revenue rule wrong?
It is not wrong so much as scale blind. A percentage of revenue gives the same instruction to a contractor doing five million a year in a metro and a two truck shop in a county of forty thousand, because a percentage has no idea how big the market underneath it is. In a town the constraint is usually not the budget. It is that only so many people will need that job done this year, so past a point the extra money has nothing left to buy.
What if there are not enough jobs in my county to spend the budget on?
Then you have found the real ceiling, and it is worth knowing about. A fixed market saturates: once you are reaching most of the people who will need the work, more spend raises the price you pay per job rather than the number of jobs. That is the point where the money is better spent on the customers you already have, on the work coming back around, and on being the shop people name without searching. The calculator shows it as the cost per job won climbing while the job count does not.
How do I work out my cost per lead?
Take everything you paid a channel over a period, including subscriptions and anyone you pay to run it, and divide it by every lead it produced in that period. Include the leads that went nowhere, because you paid for those too. That gives you cost per lead. Divide it by your close rate and you get the number that actually matters, which is what each won job cost you to get.
Why does the calculator ask for gross profit instead of the invoice total?
Because the invoice total is not yours. Materials, subcontractors and the labour that job consumed come out of it first. What is left is the money a lead can be paid out of, so it is the only honest basis for deciding whether a channel is worth its price. Using revenue instead makes every channel look affordable right up until the year ends badly.
Does this store my numbers or ask for my email?
Neither. The whole calculation runs in your browser, there is no email field, nothing is sent to a server and nothing is saved. Closing the tab is how you delete it. That is also why there is no way to come back to a saved result, which is a deliberate trade.
How do I compare a lead platform with my own website?
Put both through the same three lines: what it cost, how many leads it produced, how many jobs those became. The complication is that a website is mostly a one-time cost and a lead platform is a price per enquiry, so they look different depending on the window you measure. The second half of this page handles that by working backwards: given what you already pay per job, it shows how many jobs a site would have to produce to cover its whole cost, and what those same jobs would cost you bought.
Can I use this for Google Ads, or Facebook, or a van wrap?
Yes, and that is the point of it. One channel at a time, one window, the same three inputs. A lead marketplace, an ads account, your own site and a van wrap all reduce to cost per job won and the share of a job's profit it eats. Most arguments about marketing spend are two channels being measured different ways.
If the answer was "build something I own"
That is the whole argument of the book, which costs $14.99 in paperback and $6.99 on Kindle and covers the listing, the reviews, the site and the weekly hour that keeps all three working. The 27-point checklist is free and on the page, no email required, and the Site Kits are the build itself at $99 if you would rather not start from a blank page.