As a business owner, no doubt you've often thought about the question as to how much you should spend on advertising, and where exactly you should spend it. For most people who own small businesses, these questions simply give you more headaches beyond those simply suffered in the normal everyday operation of your business.

In fact, there aren't any simple answers as to how much you should spend on your advertisement.

Depending on your business, there are those who suggest that you should spend anywhere from 4 to 10% of your gross receipts on advertising.

Of course, the conundrum is, it's likely that your business is not going to survive unless you have a continuing flow of new customers. However, it's not likely, either, that you're going to get those new customers without spending at least something on advertising and get the word out about your business.

How to Develop Effective Advertising

Have you found yourself in this situation? You pay for advertising and then sit back, waiting for new customers to arrive. The only thing is, you sit and sit and sit, and they never come. Sound familiar?

Don't worry; that has happened to many of us as well.

What most people don't know is that you don't have to just worry about knowing where to spend your advertisement money.

You also have to establish the following about advertising:

You have to have a marketing plan.
You have to have an advertising strategy.
You have to know about headlines, ad copy and visual presentation.
You have to know how to track the success of your advertising campaigns.

Your Marketing Plan

Your marketing plan is used primarily for you, so that you can identify what your products and services are, what they cost, their particular strengths and weaknesses, and finally, what your competitors' strengths and weaknesses are as well.

Your Advertising Strategy

You need to understand just exactly what you expect to get from your advertising.

For example, do you just want to get your name out there so that customers will think of you first when they have a particular need you can fulfill? Or do you want your customers to come to you on a particular day, like Saturday?

Do you want your customers to come in and simply browse, whereupon they suddenly come upon an object they can't do without? Or do you want them to come in and buy a particular product?

Do you want enough customers so that you can pay for your ad? Or do you want a customer who will come to you again and again, becoming a lifelong customer who will help pay your advertising costs over the next several years?

Once you know what you want, you can better formulate just how you should do it.

Ad Copy, Headlines and Visual Presentation

Many businesses actually put money into advertising without thinking much about their sales pitch or presentation; simply, the quality may not be as up to par as it should be. If your advertising is not quality, then it doesn't matter how much money you spend on advertising or on your distribution, for example.

Make sure you test the advertising you plan to use in smaller markets before you put a lot of money into it to go to larger markets. You have to know that your advertising is going to have value before you put a lot of money behind it.

Track the Success of Your Advertising Campaigns

One particularly successful advertising campaign might be that you can tell your customers to save another 10% if they mention your ad. Or, you can suggest that they can register to win a free sample of product if they fill out a form and tell you how about your business. You can also advertise a particular product in your ad and then track how well that particular product sells.

It really doesn't matter how you track your advertising, as long as you do.

In Conclusion

The best way to spend your advertising dollars is to make sure you target an advertisement specifically to the customer base you want to serve.

If you don't track your advertising, then you are simply "shooting blind." This is a waste of your time and money.

Even with more widespread advertising, if you are still "shooting blind," then you're only making a bigger mistake. You have to track your advertisement so that you know what's working well and what you need to change. If you don't, you'll simply repeat mistakes over and over again, and further waste your time and money. This can actually make your business fail.

If you only rely on instinct, this isn't necessarily going to help you; you may be choosing wrong so that your advertising dollars aren't getting spent to the best benefit. And in fact, you may lose all of your money for no gain.

When it comes right down to it, if you want to make money from your advertising, you need to prepare, plan, track and study your advertising campaigns and see what the results are. Base your advertising decisions on facts and on the results you see. Once you've made the right advertising decisions, making profits from your business should come much easier for you.

About the Author

John Navata has helped thousands of people in over 200 countries around the world start and run a successful home business. Discover 3 easy steps to start your own home business and subscribe to "Residual Wealth Factor System" Free Internet Business Secrets Mini-Course. You'll receive a complimentary 3 days and 2 nights for two when you subscribe at

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