Advertising is not merely a business expense; it’s an investment in building
sales. Future growth of any business depends considerably on how well you plan and
implement your advertising program. It is common for a small business to designate the
amount of its advertising budget as a percent of sales. Setting the advertising budget
shouldn’t be pure guesswork. Trade journals for various industries provide
information on the average advertising expenditure for different types of businesses.
Armed with an annual dollar advertising budget figure based on your estimated sales,
you’ll want to make a monthly budget to plan for your varying advertising needs
during the year. Some types of businesses have major sales during particular months.
Others build heavy sales around the holiday season or other seasonal activities. Every
business has its own special needs. If you are just opening your business, you will want
announcement advertisements. for a time you will overspend on advertising, as part of the
business launch.
If you are expanding a store or adding a new product line, you may increase the
frequency and size of advertisements.. Your advertising budget, like most elements of a
business budget requires planning. You’ll see special needs arise at different times.
Designate your advertising budget on a quarterly basis to allow for monthly fluctuations
in advertising spending.
Advertising sales representatives will talk with you about rates, circulation, audience
or coverage. You will be shown 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, for one medium’s cost per thousand may not mean the same as
another’s. Don’t buy ads based solely on cost. Concentrate on how well the
medium—television, radio or print will serve you in reaching your target audience.
If you would like to discuss advertising, ad budgeting or business planning, contact
the SCORE Association (Service Corps of Retired Executives). More than 12,000 volunteer,
business counselors donate their time and expertise to assist entrepreneurs. SCORE is a
nonprofit association that provides free and confidential business counseling as a
community service. For a referral to the SCORE chapter nearest you, call 1 (800) 634-0245.
