Most people spend between 10% to 20% of sales on advertising during a normal season, and raising that number a smidge for special events or holidays. The rule of thumb is 15%. But during a grand opening or Christmas sale, you should move that number to 15% or 20%. If you put your advertising dollars in the right places, you will receive all that money back and then some. That is a whole new topic to talk about at another time.
A great term to know is "feeding the fire." In advertising you always want to feed the fire when the season is at its busiest, throw more food on the fire with advertising. So increase your budget during your busy season, you will get the return.
If you are a new business, take your projected earnings from your business plan and use 5% of those dollars for your advertising. But, before you go and take out a full age print ad with those dollars, think about how you can effectively spread those dollars over different mediums and take advantage of grabbing someone through different channels.
Also, most people handle their advertising on a monthly basis. Usually you have a plan a head of time and get all of the advertising purchased and produced prior to the time you are running your sale. What you want to avoid is running around your store trying to set up your sale and proofing advertising at the same time.
Now that you have your budget, ask yourself who your customers are and who you are trying to reach and what types of lifestyles they lead. That will start leading you to the right markets to target. That is your next step. Good luck!