Develop Core Budget
Setting a Ad Budget for your company
Being the owner of a local or regional company — and a successful business in your particular market, having a practical Ad budget is necessary. To start with, you need to consider your advertising plan in the context of the OVERALL budget. Is your business profitable? If so, then some of that profit should to be directed into advertising. Advertising and marketing is a business expense, so it comes out of pretax profits from your company.
If you can afford to put 5 percent of your gross sales into advertising without posting a loss, then plan to go forward with this decision. If not — if you have a profitability problem — then stop being concerned about advertising and start looking hard at your company's cost structure. Make some those necessary cuts first. Move forward by getting your business at least to break even. Even if this means cutting back and reducing your payroll, moving your company to a smaller location with economical rent, or otherwise changing your business plan, then make these needed changes first.
Budgeting based on your company's goals
The concept of budgeting based on goals is quite simple — Decide what you want to accomplish and then design an Ad Campaign that will achieve your company's goals. It will not always work that way in reality, unfortunately, but it's a great theory. If you can apply this idea even partially, it can strengthen your company's advertising budget and plan.
Possible budget's based on your company's goals.
A. Set you objective by choosing the goal of expanding the customer base for your business by attracting a crowd to supplement your traditional service or product. B. Clarify the gap between current and desired results. A company owner may decide to create an increase in mid-day or late-hour business, while sustaining the current level of business hours. C. Make a list of types of advertising that may be effective in achieving your company's goals. You may decide to hire someone to deliver special promotions to office buildings or businesses in your area in order to encourage future customers to engage in a decision to purchase your service or product. D. Think about the scale of advertising needed to achieve your company's goal. Is the gap between your current sales and your company's goal a large one? If it is, then you need to boot your advertising in order to fill this gap. You'll probably need to increase your sales by 25-40 percent at a minimum. E. Set your company's target for your overall budget that is most appropriate and proportional with the scale of your business goals. When setting your sights high and your budget low, you're expectation may be disappointing.
After reviewing with Message Direct regarding these steps, you'll have a clearer idea of what might need to change in your approach to advertising. Yourself and Message Direct will have some ideas about new and different types of ads and/or media to use, and you'll have a general sense of whether your historic levels of advertising are appropriate or whether you need to escalate in order to accomplish an ambitious goal.
This kind of strategic thinking involving this goal-based budgeting is especially helpful when you're trying to achieve something new and different with your advertising. However, coming up with a specific budget level through this goal-base approach isn't easy. Message Direct recommends beginning with the more specific and practical percent-of-sales method, then using a goal-based analysis to refine your company's budget and focus your business approach to advertising.
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