Estimating an advertising budget

Tips for estimating an advertising budget and devising a general marketing strategy for your small business.

Starting a new advertising campaign for a small business can be exciting...and expensive. Effective advertising requires knowledge of your consumer base, understanding of costs involved and plenty of connections to help you place your products or services. More importantly, you will need to clearly define your advertising strategies when developing your budget.

The following are some general tips for estimating an advertising budget for a small business based on traditional advertising methods. The understanding is that because you run a small business, your budget is small as well; these tips are designed for use by business-owners on a budget. Your advertising campaign may incorporate some or all of these simple strategies. Depending on which strategies you select, your estimated price will be higher or lower than the final price estimate for the following services.

Tip 1: Free advertising

There are many ways to get free credible advertising for your small business. One quick and simple way is to put a public relations spin on your product or service and contact your local paper, television stations and appropriate professional organizations with the story.

There are three easy ways to get the attention of the publication: 1. Put together a press release, including your contact information and announcement. If you have a timely event to tie-in with the story, such as a grand opening, publications are more likely to pick the story up. 2. Contact editors and on-staff writers directly to pitch the story to them. 3. As a last resort if other attempts to get your story published in a local publication fail, commission a freelance writer to write a brief 500-word story that you can then submit directly to the paper.

Additionally, most publications have a calendar of events. Arrange some sort of event at your business location, such as a "liter awareness day" or chile cook-off. Submit the event to you local publication's calendar. Invite local celebrities (news anchors, government officials) to the event and alert the local publications of who will be there. If you can arrange to get a local news-anchor to MC your event, chances are good that the television station the anchor is associated with will also come to the event with cameras. After all, everyone likes to show their employees doing good things in the community.

Tip 2: Postcards

Mail postcards to all residents within a two mile radius of your establishment. Your postcard should announce your presence and invite neighbors into the business by offering coupons for services or products. If you are an especially small business, the bulk of your customer base could very well be those residents. Be proactive about making contact with them; show them that you are interested in their business.

You can design a postcard yourself using simple software. To print about 4000 postcards will cost you under $500. Stamps will cost you an additional few hundred dollars (all of which is tax-deductible). Alternatively, you can hire a college student to deliver the postcards door-to-door for free.

Tip 3: Newspaper ads

Local publications generally run off of sold ad space. You can purchase ad space usually for a few hundred to a few thousand dollars, depending on the publication, size and run-time of your ad. Generally, buying ad space is an efficient way to get the name recognition of your small business out there to thousands of potential customers. Contact the sales department of your local paper for more information and rates.

Tip 4: Sponsorships

Many small businesses sponsor non-profit newsletters, programs or fundraisers. Sponsoring a business not only provides a nice tax break, but it helps to get your name out into the community. Contact local professional organizations, non-profits or other charities for opportunities. Sponsorships run several thousand dollars, depending on your arrangement with the selected organization.

Total estimate for the above multi-functional strategies:

Newspaper/Newsletter story: FREE

Postcards: $500-$1000

Newspaper Ads: $500-2500 (depending on location, size of ad, circulation, run time)

Sponsorships: $500-15,000

Total Advertising budget: $1500 - 18,500

Now that you have some simple traditional advertising tips, go out there and sell your business. Good luck!

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