Check the numbers in four steps
In short
Paid leads can be worthwhile when the completed jobs they bring in leave enough money after direct job costs to cover lead charges, reviewing and quoting time, overheads and your required profit. A cheap lead can still be expensive if customers rarely respond or quotes rarely win. Start with your own job margins and a capped test; neither a paid contact nor a promising forecast guarantees work.
Step 1
Fill in the break-even worksheet
This invented example is for a small painting business quoting interior repaint jobs within its usual service area. Every amount is AUD, excluding GST for this example. The figures are assumptions, not market prices, industry averages or expected results. Use the same GST basis for all your own figures, allowing for whether GST is recoverable.
Gross profit per job means revenue less direct delivery costs. Include materials, labour including your own delivery time, subcontractors and job-specific travel. Gross margin is that amount divided by revenue. Review and quote time sit outside delivery costs in this worksheet, so count them once. If jobs differ greatly in size or cost, calculate each job type separately.
For the example, 20 paid leads cost $800. Reviewing them costs another $120 in time. Twelve customers respond and receive a quote, taking $360 of quote time. The combined acquisition cost is $1,280. Three completed, paid jobs at $500 gross profit each leave $220 before overheads and tax. This is a lead-channel calculation, not the break-even point of the whole business.
To cover acquisition costs alone, divide $1,280 by $500 and round up: three completed, paid jobs are needed. That is 15% of the 20 paid leads. For a forecast, the exact threshold is 12.8% of paid leads, or about 21.3% of the 12 quotes. Allow more room for overheads and profit before calling the channel worthwhile.
Copyable worksheet with hypothetical inputs
| Input to replace with your figures | Worked example |
|---|---|
| Paid leads and price per lead | 20 leads × $40 = $800; no subscription or other fees assumed |
| Review and contact time for all paid leads | 20 × 6 minutes = 2 hours; at $60 per hour = $120 |
| Customer response rate | 12 responding customers ÷ 20 paid leads = 60% |
| Quote rate among responding customers | 12 quotes ÷ 12 responding customers = 100%; assumed suitable here |
| Time per quote, including visits and follow-up | 12 quotes × 30 minutes × $60 per hour = $360 |
| Completed, paid job rate among quotes | 3 jobs ÷ 12 quotes = 25%; also 15% of all paid leads |
| Job revenue and direct delivery cost | $2,000 revenue − $1,500 direct costs = $500 gross profit per job; 25% gross margin |
| Acquisition cost per completed, paid job | ($800 + $120 + $360) ÷ 3 = $426.67 |
| Money remaining before overheads and tax | 3 × $500 − $1,280 = $220 across the test |
| Repeat work in the starting calculation | $0; add only separately measured repeat-job contribution |
Step 2
See which assumptions change the decision
Change one input at a time before buying more leads. The table holds the other worksheet inputs constant, including the $40 lead price. Fractional jobs represent a forecast average across repeated batches, not an actual job you can bank. The base scenario leaves little room for overheads, so a small fall in response or margin can reverse the result.
Your overall completed-job rate is response rate × quote rate among responses × completed-job rate among quotes. In the example, 60% × 100% × 25% = 15%. Keep those denominators visible: a 25% quote win rate is not a 25% win rate on purchased leads.
At the base assumptions, the acquisition-only ceiling for the lead price is (3 × $500 − $480 in review and quote time) ÷ 20 = $51 per lead. Spending that much leaves nothing from this channel for overheads or profit. Subtract those allowances before setting your own maximum price.
Hypothetical sensitivity table
| Change from the base scenario | Forecast result before overheads and tax |
|---|---|
| Base: 60% respond, 25% of quotes become paid jobs | 3 jobs; $1,280 acquisition cost; $220 remaining |
| Only 10% of quotes become paid jobs | 1.2 jobs on average; $1,280 acquisition cost; $680 shortfall |
| 40% of quotes become paid jobs | 4.8 jobs on average; $1,280 acquisition cost; $1,120 remaining |
| Only 40% of customers respond | 8 quotes and 2 jobs; $1,160 acquisition cost; $160 shortfall |
| Gross profit falls to $300 per job | 3 jobs; $1,280 acquisition cost; $380 shortfall |
| Each quote takes an hour instead of 30 minutes | 3 jobs; $1,640 acquisition cost; $140 shortfall |
Step 3
Check what you buy and what it costs
A lead may buy access to an enquiry or contact details, with several businesses competing for the work. Read the provider’s current terms for shared leads, subscriptions, minimum terms, renewal, cancellation and refund eligibility. A customer choosing another business or not replying may not qualify for a refund. Use the terms actually offered to your business.
For credit packs, convert the purchase price to dollars per credit, then multiply by the credits needed for the particular lead. Separate pack cash outlay from the cost of credits used: unused credits tie up cash even when they remain available. Record paid and promotional credits separately so a free trial does not hide the later cost.
Step 4
Run a capped test and compare completed work
Choose one job type, a practical service area, a review date and a cash limit you can afford to lose. Confirm how spending stops at that limit. Record each purchased lead, whether the customer responded, whether the job fitted, quote time, outcome and actual direct job costs. Log accepted work separately until it is completed and paid; a small batch or a long project cycle gives limited evidence.
If no jobs are completed and paid, acquisition cost per job cannot be calculated; record the full spend and time cost instead. Separate poor-fit enquiries from suitable quotes you lost. Adjust service area, job selection or quoting practice based on the cause, then compare the results with referrals and other channels using the same cost rules.
Keep repeat business as a separate scenario until you have evidence. For example, if one of the three customers later buys another job with $300 left after its delivery and extra sales costs, that adds $300 to the original $220. It is an invented illustration, not future income to assume. Record when the repeat job is paid and avoid attributing the same customer to multiple campaigns.
Sources and useful links
Sources checked 6 October 2026
- Business Queensland: break-even and profit
Gross profit, gross margin and the distinction between gross and net profit. Checked 6 October 2026. The lead worksheet and sensitivity calculations are original hypothetical examples, not government or industry benchmarks.
- business.gov.au: develop your marketing plan
Set marketing goals, timing and budgets, then evaluate results. Checked 6 October 2026.
- Current Credit pricing and lead terms
Live product wording checked 6 October 2026; prices and offer conditions may change.
