Advertising is an important component of any business’s marketing strategy, but figuring out how much to allocate towards it can be tricky. As a rule of thumb, it’s helpful to have two budgets in mind: one for sustaining current revenue and another for driving robust growth.
If your goal is simply to maintain your current revenue levels, a good starting point is to allocate 5-10% of your sales towards advertising. This should be sufficient to keep your brand top-of-mind and attract new customers.
However, if you’re looking to achieve rapid growth, you may need to increase your advertising spend significantly. In some industries, it may be necessary to allocate 20% or more of your sales towards advertising in order to drive the desired level of growth. The exact amount will depend on the specifics of your business and the industry you operate in.
Startup businesses may have a harder time determining their advertising budget, as they may not have enough revenue to use a percentage of sales as a gauge. In this case, it’s often helpful to start with a fixed number, such as $1,000 per month. This allows you to test the waters and see what works best for your business.
Ultimately, the right advertising budget for your business will depend on your goals and the resources at your disposal. By keeping these considerations in mind and being willing to experiment and adjust your strategy as needed, you can find the sweet spot that helps you achieve your business objectives.