Explanation:
Let's assume a salon has a total gross income of $200,000 for the year. Following the recommended range of allocating 3-5% of the total gross income towards advertising, we can calculate the advertising budget using these percentages.
Example 1: Allocating 3% of the total gross income:
Advertising budget = 3% of $200,000
= 0.03 x $200,000
= $6,000
In this example, the salon would allocate $6,000 towards advertising for the year.
Example 2: Allocating 5% of the total gross income:
Advertising budget = 5% of $200,000
= 0.05 x $200,000
= $10,000
In this example, the salon would allocate $10,000 towards advertising for the year.
