There's no magic number that works for every business: "you need 500 euros a month" doesn't mean the same thing for a dental clinic in a mid-sized city as it does for an ecommerce store selling nationwide. What does exist are concrete ways to work out what budget makes sense for your specific case.
The starting point: how much a customer is worth to you
Before setting a budget, you need to know how much you can afford to pay to acquire a new customer (what's called CAC, customer acquisition cost) without it stopping being profitable. If a customer leaves you an average margin of 300 euros, you can afford to pay much more to acquire them than if they leave you 15 euros.
Why too low a budget doesn't work
Advertising platforms (Google, Meta) need a minimum volume of data to optimise their algorithms. With a very low budget, there isn't enough click or conversion volume for the system to learn, and performance stays stuck at mediocre levels indefinitely.
The learning phase needs its own budget
The first 30-60 days of any campaign are mainly about gathering data: which ads work, which audiences convert best. It's reasonable to expect weaker performance during this phase, and you should budget with that in mind rather than judging the channel by its first results.
A practical way to estimate your minimum budget
Work out how many conversions you need per month for the business to be profitable, multiply that by what you're willing to pay for each one, and that's your reasonable starting budget. If that figure turns out too low to generate enough data, it's better to concentrate budget on fewer, well-optimised campaigns than spread it thin across many.
Frequently asked questions
Is there a minimum budget below which advertising isn't worth it?
As a rough guide, under 300-500 euros a month it's hard to generate enough volume to properly optimise most campaigns, though it depends a lot on the industry and cost per click.
Is it better to start with a high budget or ramp up gradually?
It's usually better to start with a sustainable budget for at least 2-3 months (to get through the learning phase) than to raise and lower it constantly, which tends to reset the algorithm's learning.
How do I know if my budget is being spent well?
By looking at cost per conversion (not just cost per click) and comparing it against what you can afford to pay per customer based on your actual margin.