Advertising
is not merely a business expense; it’s an investment in building sales. The
future of any business hinges on how well you plan and implement your
advertising program. Yet many new small business owners confess to not being
experts in ad planning. Relax. There is a lot you can do to create a sound
budget for advertising your new enterprise.
It is
common for a small business to base its advertising investment as a percent of
estimated sales. Industry trade journals are a great source of data on the
average advertising expenditures for different types of businesses. This
information can help you develop a monthly or quarterly budget to plan for
varying advertising needs during the year. Depending on your industry, you will
see special needs arise at different times. Some types of businesses have major
sales during particular months; others build heavy sales around holidays or
other seasonal activities.
Advertising
sales representatives will talk about rates, circulation, audience, or
coverage. Most rates are based on the cost per thousand for the advertisement,
meaning the cost to you for reaching 1,000 people or homes. Be sure you
understand how such figures are based ─ the cost per thousand for one
medium may not mean the same as in another medium. But don’t buy ads based
solely on cost. Consider how well the medium ─ print, broadcast or online
─ will help you reach your target audience.
As a
business owner, evaluate the sales that you want to drive from your
advertisements. Your tactics will differ if your goal is a short-run increase
through a sales promotion instead of a longer-term push to raise sales. You
must also take other factors into consideration: whether your goal is foot
traffic, higher sales, or a specific average dollar value per sale.
If you would like to discuss
advertising, ad budgeting or business planning, contact SCORE® “Counselors to