A reader submitted a question regarding the best approach to setting an advertising budget. Your 2018 budgets may be set, however, you may want to verify what you plan to spend on advertising with these strategies from Rural Lifestyle Dealer contributing writers Rex Collins, principal of HBK CPAs and Consultants, and Bob Clements of Bob Clements International.
Feedback from Rex Collins for agriculture dealerships:
"The benchmark for ag equipment dealers is roughly 2/3rds of 1% of top-line revenues. This is an average, so some will spend more and others will spend less."
Feedback from Bob Clements for dealers that focus more on OPE and rural equipment:
"We recommend dealers spend 3% of projected gross revenue (service, parts, sales and rental) on marketing and advertising with 50% of that reimbursed by the manufacturer — if the dealer is established or the line they are marketing is established. If they are a new dealership or are working to grow a new line, we encourage them to invest 5% for the first 5 years and then 3% after.