“Build it and they will come”… a motto which is the downfall of many new small businesses.
Why? “They” often don’t know you exist! Ideally, you’ve figured out that you will need to advertise your business to attract customers.
That leads to the question, “How much money should be spent on advertising”?
The U.S. Small Business Administration has a lot of wonderful resources for small business. There’s a very helpful section on their website that addresses this: Click here
In creating an advertising and marketing budget, the SBA says: “Because marketing needs and costs vary widely, there are no simple rules for determining what your marketing budget should be. A popular method with small business owners is to allocate a percentage of gross sales for the most recent year. This usually amounts to about two percent for an existing business. However, if you are planning on launching a new product or business, you may want to increase your marketing budget figure, to as much as 10 percent of your expected gross sales. Another method used by small business owners is to analyze and estimate the competition’s budget and either match or exceed it.”
That information is also available from the SBA: Click here
So how much will advertising cost you? Perhaps a better question to ask yourself; “How much is NOT advertising costing you?”