(image source: imelda)
Every time I go to the hair salon I make a joke about wishing that I could write off the ridiculous amount of money that it costs to maintain my hair. Â We all have a good laugh about it and go on with our days. Â OK, maybe I don’t get to write off my hair as a “marketing expense”, but there’s a good chance that YOU are missing out on some serious cash back if you aren’t writing off valid marketing expenses.
27% of small business marketers didn’t know that they could write off certain marketing expenses
My friends over at 99designs have just recently run an interesting survey with small business owners and what they found will shock you.
Just over a quarter of all small business owners have the opportunity for some found money by deducting as many marketing expenses as they can.
You might know that you can deduct “advertising” but remember advertising can include printing business cards, flyers, pay per click, Facebook, LinkedIn, trade shows, etc.
If the bulk of your business is online marketing based, then you might already know this, but if you are like many small business owners, you may be too concerned with the day-to-day aspects of running your business to realize that you can actually write off lots of different marketing activities.
Here is a snapshot from the 99designs Infographic that shows where small business owners would put a $500 tax refund.
NOTICE — all of these are marketing expenses that are eligible as a tax deduction. Â So, when you look at it — they are not only a marketing expense, but a solid investment in your business.
It’s not an expense if it makes you money
Reading through 99designs Infographics, made me realize something Â – expenses are tax talk, not marketing talk. Â You’ve been conditioned to think that expenses are BAD and that you should have as few of them as necessary. Â While this may be true for some things, it isn’t true for those activities that actually generate customers. Â And marketing is one of those activities. Â This is why we call it an investment — it’s not just a play on words.
70% of the small business owners asked said that the money they spent on marketing was a good investment. Â I’d like to speak to the 23% that weren’t sure — ok, let’s throw in those 7% naysayers too.
Let’s take this hypothetical $500 refund that was mentioned in the survey. Â Imagine that you have a check in your hand from the IRS for $500. Â You have a choice to make about what to do with this money.
- Throw a party for your team
- Buy a new laptop or tablet
- Take a trip to see a client or customer
You can use this money to BUY MORE CUSTOMERS
Yes — you can actually buy MORE customers — and that is what investing in marketing does. Â Assuming that you understand what your customer net worth is, you can invest this hypothetical refund into a marketing channel that delivers MORE of your ideal customers.
And if you look at the first chart I showed — that 32% of the surveyed small business owners did exactly that — they put it in their web sites, and 17% put it into online advertising.
If you find yourself among those 30% of small business owners who either aren’t sure about the benefits of investing in marketing or haven’t seen the benefits of investing in marketing, I would encourage you to take a second look at the following:
- Who is your ideal customer: Â If you are trying to sell to everybody, your marketing dollars are being diluted and wasted. Â First — focus your efforts on identifying your ideal customer from your existing customer base. Â Create specific offers that will be appealing to them.
- Adjust your message to speak to your target audience. Â Take another look at your web site and marketing materials, are you speaking clearly to one specific audience, are you helping them solve their problems, are you showing them how your offer is an ideal fit to solve their problems?
- Test and tweak until you’ve improved your conversion rates to about 20% with your existing customer lists. Â Now you are ready to do some online advertising.
Why not build your own marketing money machine?
When you really stop and think about it, you probably have a process for everything in your business — except getting and keeping customers. Â Doesn’t that sounds crazy to you?
When I use the phrase marketing money machine – I’m not being over the top in a “make millions” kind of way, I’m trying to communicate how powerful your investment in marketing can be.
When you take the time to understand who your ideal customer is, what’s important to them when they are buying what you are selling and then you INVEST your money in developing a marketing system that attracts your ideal customer, you are no longer spending or wasting marketing dollars, you are investing them. Â And as the 99Designs study shows, you not only get to reap the benefits of more new customers, you get to write it off as well.