All business owners wonder how much they should spend on advertising and, while an article in BusinessWeek says there is no definitive answer, it does provide two basic guidelines any company can use to develop a formula that works for them:
1. Find out what the advertising-to-sales ratio typically is in your field.
2. Ask yourself if your business is built to leverage volume or to leverage margin.
Also remember that, depending on the size of your company and the business you're in, advertising might not be the right (or the only) tool for you. For example, as a salon owner, events, vehicle wraps, point-of-sale displays and other, similar tactics are great ways to market your business.
For more on implementing these guidelines, click here.
Source:
BusinessWeek: What Should You Spend On Advertising?
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