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Just "dollars" doesn't tell you much. A 1-2 man business that is mostly labor and an average job is a month is busy if they are on a job now and have one waiting. If you need 1,000 jobs a year to be busy, different ballgame. Also depends on gross margin.

Deptartment store like Kohl's has incredible gross margin at regular price. That's why they run "sales" of "...50% off, then use a coupon!..." and still advertise like hell.

But most trades get by on 10% to 40%. (By the way, if you don't put at least 20% on everything you're an idiot. Do the rest of us a favor and go out of business NOW.)

IF (and that's a big IF), the economy was "normal" and we could see a direct correlation, I'd personally earmark about 6% of gross. But the economy isn't anything like normal so all guidelines are out the window. If you're that first example of 1-2 men, word of mouth and $500 per year for signs/cards/T-shirts might be plenty.
 

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How much did you spend on advertising.

Last year we spent 1.59% on $1.9 million this works out to be about $30k. This is a formal that has worked well for us. I have to make sure that you understand what is in our marketing budget. It includes SEO, website upgrades, t shirts, different web sites, google adwords, marketing materials (door hangers, flyers, business cards, yard signs,). Our marketing cost per job was $285/job with an average contract of $18,000. Hope this helps pm me if anyone needs more advice.
 

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Italian75 is posting GREAT numbers and ROI on marketing dollars. (But look at locale, too. Northern Virginia (D.C.) is probably lots better than Podunk, NE.) Good job!
 

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historically we have spent less than 2% of gross sales annually on advertising/marketing

in 2013, we will be goosing that up to about 5-7% of what I HOPE gross sales will be, LOL
stephen
 

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Wow! Really? 10-40% for marketing?

The last year I owned my company we spent less than $2,000, and grossed right around $600k from that.

I guess that would mean that I'm an idiot, and I should get out of the business NOW!! Heh, I bet there are guys in my town that wish that, too! Ha!

I figure once you get things running smoothly, you should be able to keep it around 5%, but it is true that with different areas, and situations, it might vary, maybe a lot. I gotta say though, if your dumping 40% in marketing, you have to be "churning" customers, and you're probably not.....wait for it........Innovating!

Just "dollars" doesn't tell you much. A 1-2 man business that is mostly labor and an average job is a month is busy if they are on a job now and have one waiting. If you need 1,000 jobs a year to be busy, different ballgame. Also depends on gross margin.

Deptartment store like Kohl's has incredible gross margin at regular price. That's why they run "sales" of "...50% off, then use a coupon!..." and still advertise like hell.

But most trades get by on 10% to 40%. (By the way, if you don't put at least 20% on everything you're an idiot. Do the rest of us a favor and go out of business NOW.)

IF (and that's a big IF), the economy was "normal" and we could see a direct correlation, I'd personally earmark about 6% of gross. But the economy isn't anything like normal so all guidelines are out the window. If you're that first example of 1-2 men, word of mouth and $500 per year for signs/cards/T-shirts might be plenty.
 

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These are great numbers.

I like the fact that you answered the question as it was asked, in a percentage of gross income.
Ours last year was too low, 0.003% of gross.
I also like yours per job, I haven't figured ours. We had a service division that did small $250 jobs, and our restoration division did much larger jobs, around $14,000 avg.

I'll probably break those in two and do my figures separately.

Last year we spent 1.59% on $1.9 million this works out to be about $30k. This is a formal that has worked well for us. I have to make sure that you understand what is in our marketing budget. It includes SEO, website upgrades, t shirts, different web sites, google adwords, marketing materials (door hangers, flyers, business cards, yard signs,). Our marketing cost per job was $285/job with an average contract of $18,000. Hope this helps pm me if anyone needs more advice.
 

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Just "dollars" doesn't tell you much. A 1-2 man business that is mostly labor and an average job is a month is busy if they are on a job now and have one waiting. If you need 1,000 jobs a year to be busy, different ballgame. Also depends on gross margin.

Deptartment store like Kohl's has incredible gross margin at regular price. That's why they run "sales" of "...50% off, then use a coupon!..." and still advertise like hell.

But most trades get by on 10% to 40%. (By the way, if you don't put at least 20% on everything you're an idiot. Do the rest of us a favor and go out of business NOW.)
Wow! Really? 10-40% for marketing?
He's talking about margin. You won't see many people spending 40% on marketing in a field where the average gross margin is less than 40%. Well, you might, but you won't see those people around for long.:laughing:
 
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KG007 said:
Just "dollars" doesn't tell you much. A 1-2 man business that is mostly labor and an average job is a month is busy if they are on a job now and have one waiting. If you need 1,000 jobs a year to be busy, different ballgame. Also depends on gross margin.

Deptartment store like Kohl's has incredible gross margin at regular price. That's why they run "sales" of "...50% off, then use a coupon!..." and still advertise like hell.

But most trades get by on 10% to 40%. (By the way, if you don't put at least 20% on everything you're an idiot. Do the rest of us a favor and go out of business NOW.)

IF (and that's a big IF), the economy was "normal" and we could see a direct correlation, I'd personally earmark about 6% of gross. But the economy isn't anything like normal so all guidelines are out the window. If you're that first example of 1-2 men, word of mouth and $500 per year for signs/cards/T-shirts might be plenty.
Two good mechanics can pump out some serious work. If you have boss and 2 mechanics all painting on each job you better have a long list of referrals giving you leads and then closing them for work.There's no way you will stay busy by WOM here like that. At least not in the re-paint market. If you have steady accounts from years past then you get booked up sure you can back off advertising . If you lose those accounts and you haven't been advertising good luck. We did 4 different jobs for 4 different customers last week, all repaints. This week we are working on jobs for two old clients from a few years back but in order to keep a full work load we have to continually advertise can't just rely in t-shirts and vinyl graphics. We do direct mail, print, SEO, job signs, and everything in between I'd rather turn down work than have none.
 

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Ethan, thanks for the help! I totally missed where he mentioned margin, and had my mind solidly in "marketing" . Makes sense now!

He's talking about margin. You won't see many people spending 40% on marketing in a field where the average gross margin is less than 40%. Well, you might, but you won't see those people around for long.:laughing:
 

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That's great for your volume Steve. Would you mind telling if you get any advertising dollars from the manufacturers?
The only thing I sell, anymore that I don't make, is composite decking and no, but maybe yes, there is a 2-3% kickback @ the end of the year depending apon volume, etc. New program this year.

I do home shows and of course,BILLBOARDS
 
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