6 Expenses Agency Owners Should Embrace
When you hear the word “expenses”, what do you feel?
Panic? Stress? A strong urge to make yourself a margarita and retreat to your Netflix cave?
It’s not the kind of word that makes it easier to haul yourself out of bed in the morning – but there are some instances where spending is the best thing you can do for your business.
These are a few of the things you shouldn’t skimp on – even if you REALLY like the idea of keeping extra dollars in your bank account.
Advertising and marketing
When your pot of gold is running low, what’s the first thing to fall of your expense list?
If you answered “advertising and marketing expenses”, congratulations! You’re very much in the majority – but that doesn’t mean you’re right. Here’s the thing: maintaining your reputation and market position is kind of like maintaining your health and fitness. You can work like an Iron Man contestant for MONTHS and earn that coveted “front-of-mind” presence with your customers, but once you take your foot off the pedal, other brands won’t hesitate to capitalize on the space you leave. The bottom line? If you want to grow your business to a point of financial stability and maintain it, advertising and marketing expenses are essential.
Unless you’re fortunate enough to have the space and resources for a home office, you’ll need to rent a space. If the thought of forking out extra money for office space sends you into a panic, consider these three points:
- Renting an office gives you the opportunity to create a comfortable space for your team, allowing them to produce their best work (and bring in more money).
- You can choose a spot within traveling distance of the major metro spots and attract more potential employees.
- Your physical presence doubles as additional advertising for your brand! An eye-catching sign can do amazing things for your business, so don’t be afraid to invest in effective visual marketing.
Of course, renting space may not work for you while your business is young or small, but it should be on your radar as a potential investment.
For most agency owners, staff costs are kind of unavoidable. Why? Because no matter how brilliant you are, you can always benefit from a fresh perspective and set of talents.
Before you rush off and create an irresistible job ad, sit down and take a good look at your numbers. Examine your savings, and then explore the average salary for the position you’re considering opening up. If things line up, happy days! A talented new staff member could do wonderful things for your business and charm the socks off your clients. Just make sure you’re prepared for onboarding expenses, and confident in the financial future of your business.
If you’ve ever received a terrifying tax bill, you’ll know that tax time isn’t all sunshine and mojitos for agency owners. In fact, it can be pretty scary, especially if you’re not 100% sure what you might owe.
Here’s the good news: you can claim deductions on a much wider range of expenses than you might expect. Intrigued? Just refer to this tax time guide for Very Busy agency owners:
Things you can claim: branded promotional items, website expenses, online advertising, business cards, billboards, standard operating expenses, company automobile expenses, and entertainment and travel costs directly related to or associated with your business.
Things you can’t claim: a deposit on a fancy sports car, concert tickets for your aunt’s birthday, your new pet alligator…you get the idea.
This will come as a surprise to no one, but hiring a lawyer is REALLY expensive. The problem? Legal assistance only becomes more important as your business grows. Just remember, as much as it hurts to watch your budget shrink, it’s a WAY better outcome than ending up on the wrong side of the law. Plus, if the worst happens, you’ll be glad that you invested in the best legal support you could afford.
Okay, so bad debts sound…bad, but that’s not necessarily the case – not when your tax return will bail you out! Maybe you were a little too generous to your employees or fellow agency owners, and when the time came to collect the returns, there was nothing left on the table. The good news? You can often claim the loss on your tax so that it doesn’t eat into your cash flow – #winning.
All expenses are not made equal – some exist purely because your business is growing, so don’t be afraid to spend money while you’re making it! Besides, there are always some costs just BEGGING to be cut – like the ones in this article – so if you could use some help with getting your expenses under control, click here to let me know about it.