How Far Do You Go With Advertising?

I am trying first to figure out a percentage of monthly income to put towards advertising, and then decide which avenue to persue for maximum benefit.
Is there a vague formula for small busineses to put back into advertising?
Any suggestions would be greatly appreciated.
Thanks
Anita

Larger companies generally (there are exceptions) look at around 15% of budget on advertising, and you should be looking at roughly 1:5 ratio on your budget, ie spend £100 gain £500 in business.

The most important thing is to hit the right demograph, ie if you are selling cheap pizzas and kebabs, you wouldn't drop your leaflets through Buckingham Palace, this is where most people get it wrong.

TARGET the right people and your budget will increase again and again, I have a client who deals in Credit Control, and his ROI (return on investment) was awesome, I found out his father runs a leaflet distribution company, so ensured they went through the right doors, I would like to say my leaflets made this happen, but I think to be honest it came down to correct targeting.

Hope this helps!

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Web Design Portfolio | Social Media beats SEO

Anita

If I may? I personally think there are two sides to this particular coin. One is what works for you, what you can afford and if making a reasonable profit it makes sense to get some tax relief on the expenditure, for you it of course also includes how much can you cope with in terms of new business and precisely where anh how best to advertise.

I honestly do not feel there is an appropriate rule of thumb as say a percentage of your gross bottom line.

And the other side of said coin. Those that know will advise you to spend a set amount to guarantee exposure of your business. Some of these so called 'guru's (and they are out there) say they really care about you and want this that and tother for you, and in the initial start-up years you should plough as much as possible in to it. BUT...whilst I am no marketing expert it greatly depends on your business and again I feel there is no set percentage.

As an example. I started a small cleaning business in 1980 (my first redundancy) first year T/O (and that means nowt) was a hefty 6k with a pre-tax bottom line of around 3.5k.

In the second year I doubled and continued doubling every year right through to about (I need to look at the old books to be certain) 1991. By this time I had almost 200 employees and had branched well away from just cleaning to full support services. These of course were the good ol days when on-line advertising was only a dream. I used YP mostly, full page ads in several editions, it didn't so much generate a great deal but it maintained a presence for me and when I peaked at six-million pounds with a 25% pre-tax return I was delighted.

At the time of peaking and some say I peaked too soon (pack it in you smutty one's) my annual budget for advertising was around 35k per annum, take that against a PTBL of say one and a half million pounds and without calculating it I guess it was around 2.something % of PTBL profits.

Conversely (cor you've got me going now) My T/O with probably an 85% BL this first 12 months might even make a whopping great 25-40k (if I'm lucky). This business however whilst still service orientated needs advertising to get known. WoMR (word of mouth recommendations) will probably account for a large portion of business in three years time.

For you, why not allocate a figure you are happy with and see what develops. What I personally advocate, and it is just that, an opinion) is spend what you can within reason and don't borrow to advertise. That is of course without any real knowledge of what you do so some of this is very generic.

Am I competent to make suggestions of this calibre? Well I eventually made 3rd place in businessman of the year in 1993 (DTI through IiP) 10k prize with TV and Radio exposure (which was why I entered).

In case your wondering I split the company up in 99 and sold the lot. And no I managed around 7p on the £, had nothing to roll over to so contributed heavily to the government coffers. Paid of the mortgages and went into consulting.

When I mentioned earlier about advisors, don't for one minute think I mean they are not worth it because a good one is. Trouble is with the www world we live in now most professions are totally over saturated. There are some good ones about though, you just need to make decisions with your head and not your heart.

Scuse any glaring spelling errors I'm on me wee Samsung netbook.

Mike

Very well said, it is a bit like gambling, spend what you can afford to lose!

Because bad advertising will be just that, good advertising and PR is what gets the buzz out there (see PR for Dummies) best book I have bought in years!

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Web Design Portfolio | Social Media beats SEO

Thanks guy's.
Just figuring out how to use the forums!
I am impressed with the quick responses.
Does anyone know where to turn off these email alerts I am getting everytime someone replies to me?
Also, I guess leaflet drops may be a decent option, if I drop them myself..............
Don't know how I would trust some of the lads I see dropping them.......
Location and access to the gardens are my greatest concerns.
I will only drop them if I see easy access.
I am also looking into advertising in the local rags.........
I have no idea what sort of cost I will be looking for a small ad..............
More research needed.
Thanks again.

I would say a large amount of your planning lies on weather your going to use internet marketing or not?

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Anita

look up the top on user control panel, click it then look on the L/H side and locate 'edit options,' scroll down until you see the box to unsubscribe from post notifications.

Mike

I spend 30 % but not always before i start to spending i need to test at first if is converting well .im not crazy to put 1000 $ in something that i dont know !!!
lets say i make test spend 30 $ and make 60$ if i see is going well then i can put 100-1000 etc

i guess one should reach the limits while putting an advertisement regarding the business promotion and success.

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Scheduling Software and appointment management software for accounting firms

The major problem with advertising, espcially online, is the cost.

Whether it is online banners or radio advertising, you have to spend a fortune.