Set Your Advertising Budget
So let's look at how to set your advertising budget and before you launch your ad campaign, you're going to need a financial plan that you feel comfortable with. Ads do not equal automatic sales. They don't convert right away, always, and sometimes they don't convert at all. So remember the guide to advertising, written by Thomas Smith in 1885. Some customers will need to see the ad as many as 20 times. The first few times they don't even notice it's there. And then the 20th time they're thinking about buying. It's very normal to turn an ad on, depending on the season, depending on the effectiveness of the platform, and it runs, and it does nothing and sits still. It's going to be a gamble, so let's never pretend that it's not. And I don't know if you've ever tried to run ads before, but I have invested and I have a fear of investing in my business. It's something I've really had to overcome over time. Just the same as I had to overcome exposure obstacles and learn how to present mysel...
f. I always get the nervous jitters when I think about investing for the first time, or watching a marketing campaign for the first time. I've lost money before and I've lost money that I didn't have in the early stages of the business. And I would sometimes run an ad and then nervously check it all day long. Like nervously watch the clicks go by and then shut it down because I just wasn't comfortable and I wasn't getting any sales. Within four hours I would shut it down because I was scared and it was scared money. So again, when you set your advertising budget, if you feel afraid or resistant, or hesitant, or uncertain, if any of those feeling start to come to you, lower it until you feel more comfortable. Understand that it's normal and the more that your advertising works, and as it starts to pay off, the testing that you run, you will get more comfortable. But if it ever makes you nervous or you ever feel afraid to put that much money into it, then cut the budget a little bit. Take it back down. Make yourself feel very comfortable. Oh, I have a great tip. So I have been advertising in my business since 2010. But in start up, my income was absolutely unpredictable. I would say for a good solid three, maybe four years, the income to the business was unpredictable. Also I was scrambling. And if you missed Market Your Etsy shop to Sold Out Success, it means you wake up every day thinking, what am I going to do today to get more sales? So between the unpredictable income and the constant scramble that I was on in start up for way too long, I allowed myself to live there for way too long. I didn't have a class like Market your Etsy Shop to Sold Out Success, to take or to normalize what was going on in my life. The whole finances of the business, the whole profit and everything, stressed me out so bad. It stressed me out to count on any money from my business, so I did. I just stopped counting on it. I left it alone all together. For a long time, between marketing and advertising, and listing products, and having sales, there was absolutely no method to my madness. I was just trying. I was learning. I would put ads on there. I would put them on for 20 to 40 dollars that day and then I would nervously strip them off all of the platforms that I'd had them set up because I wasn't getting any sales, and I didn't have 40 dollars to lose. And I didn't want to spend any of my family's money. I was trying to rely on the business to grow the business. So if you're in that same boat, you definitely want to rein that in. Scared money doesn't win. I have a good strategy for you that you can look at if you're in the start up phases, and if you feel that, if that resonates with you. If the unpredictability of the job scares you, if the finances scare you, if the finances stress you out, I adapted a plan for business from the book, All You're Worth. I heard about this plan from JD Roth. He is a financial writer. But he recommended the book, All You're Worth, and that's written by other authors. But All You're Worth is the name of the book. In that, they have a personal financial plan that a lot of people use in life where you split up your revenue, the money you earn, to 50, 30, 20. And I'm not familiar how people use it personally. I didn't study that. But I think it's like, 50 savings, 30 expenses, 20 spend. Something like that. I don't know what it is. But when I heard that, I immediately started to apply it to my business' revenue. So I needed anything because I couldn't count on the money. And sometimes I paid myself and then I'd realize, I paid myself too much and I didn't have now money for supplies. Or sometimes I paid myself and then an ad bill I'd been running would come through and it was always a surprise to me. The bills were always a surprise to me. And there was no method to the finances of behind the scenes. So I started taking my weekly revenue, everything I had at the end of the week after whatever expenses came out, and I would put 50% to the business' needs, the supplies and the shipping. Because I found that that was the cost that often upset me and scared me the most. I never expected it and I never planned ahead for supplies. And at the time, in the start up phases, I really needed to reinvest a lot. It really deserved 50% of anything that I had left sitting in my PayPal account at the end of the week. So I reserved 50% for supplies and shipping of every week's pay, which meant that I started to accumulate this reserve of money to invest in my business because if I needed a supply, I didn't have to stress about it. Money was always sitting there. And I was again, I wanted this business more than I wanted the quick profit back then. I knew it was going to be a long term strategy and I was willing to invest in it. So I was more than happy to give back to the business 50% of everything it brought in. Then I allocated 30% to marketing and advertising. So that would cover my email expenses, my email provider which I've been on A Webber, or I was on A Webber for a long time. And it would cover any promotions that I needed to run, or any campaigns that I had coming up. I'm not making a lot back then. Let's realize this. So if at the end of the week, I had made like 300 dollars, we're talking about 150 dollars sitting for supplies. Which to me, sounds very basic now. But it was such a shock to have a savings account for my business back then. 30%, if I made 300 dollars, I can't believe I'm making myself do math on a live broadcast. It would be 90 dollars for marketing and advertising. And then I'd have the left over (laughing) for my pay which would be 60 dollars. Okay, so 60 dollars doesn't sound like a big payday. I realize that. I realize that 60 dollars does not. But remember, I want this business more than I want quick profit. So I love that 60 dollars because the best part about that 60 dollars is that it feels safe, that I know I can have it, that I know that I'm not going to take it and then owe my business this surprise expense. Okay, so that's how I'm setting up where I'm going to advertise and how I'm going to do it in the beginning. When funds are really low, and I know I want this business more than I want the quick profit. Before that 50, 30, 20 plan was implemented into my system, I allotted randomly. At random, 20 to 40 dollars for advertising per day, not knowing what was going to happen to it. Not really even putting it always together with a campaign, watching it nervously, biting my nails, waiting for sales, hoping eagerly it would all work out, worry about losing it because I needed 40 dollars really bad for my business. And then I would shut it off if it didn't convert at the minute I expected it to. But remember this quote, and I'm pulling this back from day one in, Build an Etsy Storefront That Sells, if you are not beginning your business with 10 to thousand in startup revenue, the first 10 to thousand that you earn with your art or craftwork, will need to be reinvested. I wholeheartedly believe in that. I wholeheartedly believe that the money that you earn in the beginning needs to help build the business. If you really want it to be here for the long term. I believe that if I invested that, and I think it's a success, number one, that the business starts to make 10 to 20 thousand. I think that that's a success. That means you have something. That doesn't mean all that money is yours. It means now you have the funds to work with to make more money for the long term. I believed in the financial gain of it all, but for that while and the first start up years, the loss still made me a nervous wreck. But I kept investing. I wanted that business to succeed. So you want to set an advertising budget and create a campaign that you can confidently go forward with. That you can enhance and that you can use it as a tool to build into a working marketing strategy and make it better. When you put forth an investment, you either want to believe in its purpose or its return. That's hard to do and so if you can't believe in its return yet, which is going to be hard when you first start advertising, it's going to be very difficult to believe that that advertisement is going to result in sales, you need to believe in its purpose. You're believing in its purpose to test it. You're believing in its purpose that while that ad's running, it may not result in sales, but it will start to increase brand familiarity with the market you want to get in front of and it will give back once you test it a little while and play with the whole thing. You can also adjust that 50, 30, 20 plan to suit your needs. This money, to me, with business, is all about getting comfortable, staying comfortable, keeping myself comfortable, and there have been times where I've been called to invest and the amount scared me a little bit. And then, in that case, I have to ask myself, what's the worst thing that would happen if I invested that money? And then what's the best thing that would happen if I invested that money? Because sometimes that best thing, the return is so great, that it's worth the risk. And that's how I always determine is that going to be worth the risk or not? But be sure to set the advertising budget where you're comfortable and you can grow it and you will grow it as your business grows.