Marketing and Tax Deductions

Much of my entrepreneurial experience has been spent with Real Estate investing, but I have also owned, and do own other types of businesses, and have provided startup, growth, and marketing training for business owners in a variety of different product and services businesses. One universal truth of business ownership is that marketing and sales produce the life blood and income of a business and are the most important tasks to be conducted. This also means that the costs and deductions associated with marketing and sales are among the most sizeable of any costs or deductions for a business. In this article we will identify a few vital elements related to marketing, sales, and tracking of these activities and expenses.

  1. Marketing and sales should never take a back seat to other activities—It is essential to block sufficient time to pursue these activities every single week. Many business owners place other less important items ahead of these critical activities, and Friday afternoon comes along, then, almost as an afterthought, the business owner realizes that they need to spend some time on marketing and sales.
  2. Marketing and sales budgets should be allotted from Day 1 of the business—Not only time, but budget is critical. Marketing, in particular, costs money to generate leads, along with time and energy. Failing to have a reasonable budget is like going on vacation with no money, you won’t get far, and will have a miserable time.
  3. Multiple methods of marketing are essential—Every successful business has a dozen or more methods of marketing and is tracking their usage and success. A marketing method that has been given a reasonable trial but failed to produce the quality and quantity of leads expected should be replaced with another marketing method. Only with clear tracking will we discover the methods that work, and the ones that fail.
  4. Your best people should be the frontline marketing and salespeople—Having a solid marketing team and sales team is also going to require sufficient budget, and a willingness to reward these people for success. Many times, the best advocate of the company is the owner, and if your abilities in marketing and sales are effective, then this is how you should be spending your time. If not, then hire high quality professionals who can produce leads, and other professionals who can convert sales. Team leaders should be seasoned and understand the company well enough to train top-notch team members.
  5. Marketing and sales require careful tracking—Tracking has already been mentioned above but bears repetition. Where the dollars went where the time went are critical to the end result and also to the tax returns that will be filed. You will need to identify your key performance indicators (kpi’s) in advance and how to measure them, plus how to have reports generated that are quick to evaluate. Many companies think that a report on everything is the best policy, but if the decision makers cannot sort through the primary reports in about 30 minutes on a Monday morning, then the data is not very helpful and will not be properly used.
  6. Business owners need to be prompt in making decisions—this is not meant to imply that decisions are not weighed carefully, but owners should have key advisors, discussions should not be lengthy, and clear decisions must be timely. Change of staff, change of positions, change of methods, tactics, and processes are high priorities for every business owner.

In summary of the above, it may be time for some business owners to reevaluate priorities in order to maintain and produce growth in their businesses. Entrepreneurs put their heart and soul into starting a business, that same business must be assisted to float rather than sink. At the core of the process is treating the areas of marketing and sales with their proper importance and urgency. And careful tracking will assist the business owner in keeping the business afloat, and gaining the benefit of optimal marketing and sales, and claiming proper deductions in these critical areas on tax returns.


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