By Paco Arespacochaga
In today’s business environment, a business owner must be well equipped with ways and means to maximize his advertising and marketing investment. Yet, one question still brings back different answers.
“How much should I invest in advertising?” usually generates responses such as:
5% of your desired gross profit
10% of your desired gross profit
5% of the gross profit you made the last fiscal year
10% of the gross profit you made the last fiscal year
Don’t spend anything more than necessary
Don’t spend anything at all
And there are many more. All these answers are true to some extent because there really is no “one absolute” answer. In marketing 101, we were taught that a business should spend 10% - 15% of what they wanted to gross in revenue. So if a business wanted to make $150,000, it should set aside a budget of $15,000 to $22,500 just for advertising and marketing expenses alone.
The sad truth is that many start up business owners perceive advertising as a necessary “evil” as opposed to a business necessity. Feel free to call it business suicide if you must because that is what it is.
In a marketplace where everything is all about perception and perceived market value, taking no action in effectively positioning your products and/or services doesn’t mean you’re not you’re protecting your business equity. It is quite the contrary. This is because your inaction is giving leverage to your competition, which is doing the opposite of what you are doing.
Your advertising budget reflects the type of business you have. Invest in your advertising. You don’t wait to make money before you begin advertising. Begin advertising to MAKE MONEY!
Next blog… Different Types of Advertising and Which of Them Benefits Your Business.
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