If one of your new year's resolutions is to boost sales, read on. Here are five steps to help you develop an effective advertising strategy that can increase awareness of your business - and increase your profits too.

1 Establish the ground rules
The first step is to determine the goals of your advertising campaign. Are you advertising in order to increase customer traffic, build short-term sales or promote a new product or a sales event?

Other questions to ask include: What image do I want to project? Who are my customers and why do they buy from me and when?

Answering these questions will help you pinpoint the best timing and strategy for your advertising.

When you're ready to set your budget, decide what percentage of your annual sales you want to spend on advertising. Industry averages for retailers range from 1.3% to 7.1% of annual sales, depending on the type of business, according to the Retail Council of Canada. Trade journals can help you determine an appropriate level for your business.

2 Choose the right method for your business
Deciding which advertising method will work best for your business will depend on your goals, your target audience and your budget. Newspaper ads, for example, provide local coverage, precise timing, and lend themselves easily to coupons or contests. Radio allows you to reach listeners at different times of the day and can require little or no production costs. It is still fairly inexpensive to advertise on the Internet, compared with traditional media. Flyers, the telephone directory and local cable TV will help reach potential customers in their homes.

3 Reward your customers
There are many in-store promotions you can use to help spread the word about your business. Offer gifts or discounts to customers who refer friends and family to you. Distribute coupons for future purchases. Hold fun contests for valuable prizes, or establish a frequent shopper program. You might offer a gift or reduced price when a customer spends more than a certain amount.

To draw people into your store, consider a window display. A street-front window is prime advertising space, as most large department stores know. It's an ideal place to project your business' image and promote current specials and new products.

4 Be a good corporate citizen
"Goodwill" advertising promotes your business while fostering its role in the community. Become involved with organizations that reflect your personal interests. For example, you could sponsor a local soccer team or offer space to your favourite charity for an event.

To keep costs down, explore the possibilities of cooperative advertising with other business owners who support the same causes. Suppliers, in particular, may be happy to lend their support if it puts their products in the community spotlight.