Finding & setting your ad budget % based on sales {in wedding industry}

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Taking your business to the next level can be both thrilling and challenging at the same time, to say the least. There’s nothing better than watching your inbox fill up with inquiries after a successful ad campaign. But any entrepreneur knows there’s a lot more to it than that (and wedding industry entrepreneurs are no exception).

Whether you’ve been advertising for ages but need better results or you’re just starting out in business, you can’t really do anything until you know what numbers you’re working with.

The Small Business Administration recommends spending 7-8% of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in sales and your net profit margin — after all expenses — is in the 10 percent to 12 percent range. In competitive industries, experts may recommend up to 20%…*

So how do I know how much to spend on advertising?

1. Know what your goal/predicted revenue will be. Are you going to make $10,000 or $100,000 each year? Our rule of thumb? 3 parts realism to 2 parts optimism!

2. Know, at least roughly, your profit per wedding or per unit. ie. If you sell a $1,000 photography package, your cost is $300 and profit is $700. If you sell 100 widgets at $2 each, and your cost is $1 each, your profit $1 and you have a 100% mark-up.

3. Run the ‘find your ad budget’ tool we cooked up above and see if it helps.

4. Stretch your ad dollars as far as they’ll go by targeting as much as possible and track your ads, always & in all ways.

5. Measure the value of each advertising dollar as you go. If an ad costs $1 and generates $5 in sales, then spending $20,000 should generate $100,000. If it costs $1000 and generates $50,000 in bookings, then spending $3000, should bring in $150,000. If $1 makes you $100, then spending $100,000 will make you $10,000,000. You get the picture!

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