Budget+considerations

=There is a ratio for the advertising spend, varying between industries, but most industry's recognise that between 2-7% of the Gross revenue of your business "should" be spent on advertising. This is considered "common business practice"... but it is easy to ignore this when things are tight.= = = =~ The man who stops advertising to save money is like the man who stops the clock to save time ~= =Thomas Jefferson= = = =Each business is very different, however the following formula is often recognised as useful.= = = =If your business is a high turnover, low profit per item business like Coles, you should be spending around 1-2% of your ‘next years’ anticipated annual turnover. If your business is a low turnover, high profit per item business, you should be spending closer to 10% of your ‘next years’ anticipated annual turnover. =

=I highlight this because advertising could be a part of your budgeting process yearly, that way the ROI is easier to see in the overall picture.=

=Also, if you need to make a higher than normal impact because of say, a new product launch, you should consider increasing your budget for the period of the launch to maximise it’s effect.=

=Being aware of what your competitors are doing, how they are presenting themselves also needs to be factored into the equation.=

= = =Part of the budgeting process is to understand that there needs to be a measurement of the advertising, an estimate of the ROI on what you have invested. You cannot fully represent your actions in your budget if you don't have an effective method of measurement that suits your business.= = = =When online, the stats of behind the activity is easily found, when you know what you are looking for, but when in real life, you need to use other methods.= = = = = = = = = = = = = =There is an old adage, " I know I waste half my advertising budget, I just don't know which half..." If you measure your efforts you have a much better chance of figuring out what really is Effective Advertising.=
 * =Counting those that make it through the front door, as well as number of purchases made during any given day or week when pushing very hard on a type of advertising that is not so easy to perceive, like Radio or TV can be very fruitful, as well as giving you a ratio of person to sale... It is quite powerful to find overall that 80% of customers that come through your door choose to spend. In the obverse, noticing that only 10% of those that come through the door can inform you of other situations.=
 * =If you just want to use your weekly sales figures, that are recorded along side of your advertising efforts, produces the means for a process that you can look back over 3-6 months... or hopefully a whole year and see and ebb and flow, or not, which is just as useful.=
 * =Using the coupon is such an easy way to know whether or not that message got to your customer.=