How Much Advertising Budget a Small Business Needs

[Mika]

A small business means a business that is started with a small capital, sells few products and generates small revenue. In order to generate sales and revenue, even small businesses are required to run ads. You will hear business gurus saying that you can absolutely start a business with zero cost (and zero advertising), however, this is not true. No matter what you are selling and how you are selling, you need to spend money on advertising and promotion.

So, how much money should a small business spend on ads?

Spending on ads is relative to the number of products you are selling and the revenue you are pulling. According to Forbes, Coca-Cola spent 18.3 percent of its revenue on advertising in 2018. Annual growth from advertising accounts for 7.9 percent.

As a small business owner, you have a limited advertising budget, you cannot spend a lot of money on ads because it adds to your business operation cost, and your net profit will decrease. Well, advertising can build sales and give you sharp growth but that will happen only when your ads have a high conversion rate.

 

[Mango9]

As a small business owner you definitely need to spend money on ads and promo so that the general public can get to know your product and petronise you, even big business do spend money on ads to keep their products trending in the market so no matter the business you are handling you definitely going to spend money on ars

 

[saoussen5765]

People will purchase in the first time but after a while discover that what was advertised doesn't fit the advertisements then will stop purchases, quality and trustworthiness is required.

 

[eldavis]

It depends though, there are so many factors to consider here, a small business in a rural area would definitely spend a lot less in advertising than a small business in an urban area, in other words, location plays a major role when it comes to paying for advertising. Making use of various social media platform is also a good way to advertise and the best part about it is that it can also be done for free if you want to. The cost of things is also another factor to consider as well.

 

[Jasmine]

How much ad budge a business needs? Well, it is really difficult to answer this question because without knowing the business nature, business market, business actual size, and the resources the business has. If you have a store that already ranks high for a couple of high traffic keywords and receives a huge organic traffic, it might not be necessary to spend a lot of money on ads as you will be already generating sales through the existing organic traffic. However, if your store does not rank and has no organic traffic, the only way to generate sales is by running ads and how much sales you would be generating will be entirely depended on the amount you spend on ads, which means you might be spending a huge sum on ads. However, if you are generating some organic traffic, and want to scale your sales, a moderate ad budget will help you.