Advertising Budget:
Business owners often ask me how to determine what their advertising budget should be. I thought I'd take a moment and relay my thoughts on this subject.
These are the things that go into determining a budget. It is much more complicated than the standard 4%-6% of gross revenue.
First, what business are you in and how much competition do you have in your category.
The more competitive you industry, the higher you budget needs to be.
Secondly, how many locations do you have in a 50 mile radius?
Third, how new is your business? Usually your first year the budget is larger to establish yourself. This is probably the reason many businesses fail their first year. I have yet to meet a new business that has an adequate advertising and marketing budget. Some lucky businesses can add money to their plans, but some unfortunate businesses financially cannot. These businesses sit like an injured fish in a shark pond. If they have a lot of competition, they are easy targets. It's so much harder, and more expensive, to correct this problem than to avoid it by having an adequate start up budget.
Finally, what is your price point and market reputation? The higher the price on the items you sell, the higher your frequency needs to be.
I am always available to help you set your individual budgets and strategies. Never hesitate to call!
Happy Advertising!
Quote of the month comes from the cruise director on Royal Caribbean's Majesty of the Seas. "An older woman came up to me one day and asked me if the elevator goes to the back of the ship, I could only stare at her" ! See, you're smarter than you thought!
The Next Level, Inc.
1133 Grant Street Bettendorf, IA 52722 Phone: 563.388.7000 Fax: 563.388.7004