Explore Average Advertising Costs for a Small Business
If you are thinking about starting a company, you need to make a precise budget to keep operations going and handle all expenses. To prepare the budget, you should consider the market and industry you are in and cover all important business components.
Since good marketing leads to sales, you should get familiar with average advertising costs for a small business.
If you realize you will not have enough resources to fund the business by yourself, you could look into available loan opportunities. DoNotPay presents effective products to secure financial assistance for your business.
You should create your advertising budget by allocating a certain percentage of your total sales.
To get a better image of how much you should invest in marketing and advertising, you should consider these figures:
- From two to three percent of the revenue—Some marketing professionals believe there is no need for startups and small businesses to earmark more than three percent of their annual revenue for marketing and advertising activities
- Between seven and eight percent of your revenue—The U.S. Small Business Administration (SBA) suggests business owners should allocate from seven to eight percent in case their annual sales revenue does not exceed $5 million
- From one to ten percent—Some experts are in favor of a wider range where the precise percentage depends on how:
- Long you have been in business
- Competitive your market and industry are
There is a big difference between allocating one and ten percent for advertising or marketing in general. You could narrow this amount down by looking at the average advertising costs across industries:
|Industry||Average Advertising Budget for a Small Business|
|Jewelry, leather goods, and luggage stores||4.16%|
|Real estate and brokers||3.84%|
|Schools and instruction||2.87%|
|Amusement and recreation||2.18%|
|Home furnishing stores||2.16%|
|Personal care services||1.99%|
|Brokerages and insurance-related services||1.85%|
While you should be aware of the industry and sector averages, you should not stick to that number firmly when drawing up your small business advertising budget.
You should also consider the factors important for your specific business, including the following:
- Experience—If you have an established small business, you should rely on your experience and implement the tactics that have proven to be successful in the past
- Marketing goals—To plan the advertising budget for your small business, you need to know what forms of (social) media, activities, and events are suitable for promoting your business and achieving your marketing objectives
- Size and stage of your business—If you have a startup, you might want to invest a higher percentage of your revenue in advertising since good marketing can boost your sales
- The market—You should find out where your competitors advertise to calculate how much money you need to invest to stand out on the market
Starting and running a company is a challenging task, especially if you lack financial support. While you need to prepare a detailed budget to get a clear picture of ongoing and future projects, you should also be aware of the costs you must cover.
Self-financing would be the best option since there are no fees or interest rates you need to pay on top of the borrowed money. If you do not have sufficient resources and need to borrow a certain amount of money for the day-to-day and projected activities, you could explore different:
- Types of small business loans—Based on your qualifications, credit history, and specific requirements, you should get familiar with how the loans work and consider applying for:
- Lenders—While traditional loan providers—i.e., banks or credit unions—might be the most logical choice, you could also get financial assistance for your business from:
If you need help identifying loan providers that could meet your requirements, you should access DoNotPay’s Find Online Business Loan Lender product. We can send you a list of recommended lenders in a matter of minutes!
When going through numerous loans and lenders, you should pay attention to the following:
- Eligibility criteria
- Interest rates and fees
- Repayment terms and other conditions
Getting the best loan for your business and personal needs could be taxing if you do not prepare well for the process. To ensure your loan request is approved, you should:
- Gather the required documentation, including:
- Profit and loss statements
- Balance statements
- Cash-flow statements
- Personal and business credit scores
- Prepare a loan request letter—Register with DoNotPay to get an airtight loan request letter and grab any lender’s attention
To get a compelling loan request letter, access DoNotPay and take these steps:
- Open the Business Loan Request Letter feature
- Provide the information about your business
- Enter the amount of money you need to borrow
- Upload the previously collected documentation
If your to-do list is getting longer by the day, we offer numerous solutions. You can focus on growing your business while we handle the endless administrative tasks.
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