The Good Side of Spending

The Good Side of Spending

Social Studies | Posted by YouInc.com - October 8, 2013 at 10:30 am
682
SHARE

Certain types of expenditures may actually give your business a boost – along with your spirits

Imagine spending money for fun and profit.

Enjoying your work life is likely one of the reasons you decided to open a business.  It’s a wonderful perk to be able to do things like travelling to exciting new destinations, sharing some laughs over dinner and drinks with your favourite customer, or learning amazing new skills alongside your team of employees.

And while you know better than to spend money you don’t have, or can’t afford to spend, you may discover some pleasant advantages to carefully spending some money on select items and activities that will actually grow your business while reducing your tax liability.

Sound intriguing? Start by talking with your accountant or tax specialist about your projected year-end tax position. If it appears your business will owe a lot of income tax, it may be in your best interest to explore these tactics to spend available money now in order to maximize the amount of eligible expenses you can deduct from your business revenue.

Travel for business

Go visit that customer you’ve always wanted to meet and claim the trip. Or, if you’re planning to export your products or services to a foreign market, now may be the best time to conduct your in-person market research.

Reward employees

Money spent on your employees can boost productivity and morale. Before year-end rolls around, enrol your team in some training so they can learn the latest computer application, brush up on their selling skills or master social media techniques. Or, bring in a trainer to do sessions at your business. Have fun with it.

Reward your team with a party. Celebrate their accomplishments with a year-end office bash. It’s a chance for you to build deeper relationships and get to know these important people away from the office environment.

Treat customers

A nice steak dinner, a bottle of good wine and some pleasant conversation can win over the most resistant prospect. Arrange a night out with your most promising lead or reward your most loyal customer. While only 50% of the cost of the meal is deductible (essentially, your dinner companion eats for free), you won’t complain about enjoying some well-deserved pampering.

Run with promotions

An investment in marketing may be one of your best bets to grow your business. Dying to launch an online ad campaign? Let it roll in November so you can deduct the expense. Whatever marketing activities you choose, make sure your campaigns run before year-end; otherwise, you may need to amortize the cost over this business year and the next. Consider:

Advertising. Bump up the amount of money you usually spend to promote your products, your services or your brand. Buy a few more online banners, invest in pay-per-click advertising, place a larger ad in your local newspaper or send a direct mail campaign to reach prospects.

Creating content. Now may be the best time to spend some money producing great content to pull visitors to your website or blog. Content works well to share your expertise and promote your business. Produce several short videos, record some audio podcasts, or hire a writer to wordsmith a few blog articles.

Networking activities. Perhaps you can afford to attend that industry conference you’ve always wanted to experience. Or rent a booth to connect with prospects at an upcoming trade show. Be sure to print up some brochures and fresh business cards and pocket the receipt.

While the idea of a tax deduction is attractive, ensure the expenditure is justified from a business perspective. It’s dangerous to spend money simply to generate a receipt: the expenditure should be strategic and beneficial to your plan for growth. Consult with your accountant, financial advisor and small business banker to take a good look at what your business can afford to spend – and to estimate the impact on your year-end tax liability to make sure it’s worth it.

Tags: accounting, deductible, morale, perks, productivity, recognition, relationships, spending, taxes, traits

Roger Pierce
With Roger’s experience in starting and running 12 small businesses, it’s no wonder that he is Scotiabank’s small business expert. Roger takes what he has learned and shares it with thousands of entrepreneurs worldwide in articles, blogs, videos, and presentations. He’s also co-author of the book, Thriving Solo: How to Grow a Successful Business.
Comments
Featured Members
Monika D'Agostino
Consultative Sales Academy
Jane Rusin
d'avi knitwear
See All   ► Recent Activity Recent Activity
Parth Patel joined YouInc
Tanning Salon joined YouInc
Ruby Adams joined YouInc
Trashfit joined YouInc
J Sculpt Fitness joined YouInc
Bookhungama Pune joined YouInc
mag trademarks joined YouInc