The question is always asked, how much should be spent on marketing and advertising. Some businesses start on a shoestring and grow rapidly. Others take hundreds even thousands of dollars and go at a snail’s pace. While I have never heard a hard and fast answer to how much you should spend, you need a strategy that will produce results for you. Good accountants do far more than prepare tax returns; they help you understand the tax impact of your business decisions and assist you in reducing your overall exposure to taxes. It’s important to consult them before making decisions so that they can provide guidance.
The key here is not how much you spend, but that you consistently reinvest money in your business. Determine how much you can afford, is it $100 or 10% of your gross, or maybe for a new product or service launch you need more.
Now that tax season is over, here are some rules:
- Don’t get into bad spending habits, they can kill you. Learn to distinguish between your needs and wants.
- Know where you are going before you jump in too quickly. Make decisions for new products, services, markets, or advertising based on good information. Do your research.
- Use creative financing solutions. Barter your services in exchange for what you need. Do co-op advertising/promotional programs with businesses that reach your same market. Learn what business loan options are available.
- Become known in your marketplace as an expert, your customers will send their friends and associates to you. Take advantage of marketing tactics that require more time and energy, then your money can extend your market reach. Write articles for your local newspaper, send a newsletter to your customers with tips or trends they need to know about.
- To produce the results you want, there must be a return on any investment of time or money to make sense for your business.
Remember it is the continued investment and perseverance that pay off. Small investments over time produce consistent results.
Your Challenge:
- Review what you are spending on your marketing.
- Track where your best leads, prospects are coming from.
- Adjust both your time and money.