 |
| Counting (Photo credit: recurrence) |
Promotion can cost not only money, but time. Your time is worth something. It's not a bad idea to keep track of how much time you are spending on your promotional endeavors to get a concept of what you're laying out to do your promotions. Consider how much it might cost you to hire someone to do the work necessary to promote for you. Can you do the promotion yourself in an equally effective way and do it for less money?
There are many considerations regarding value in the promotional work. Think about every possible cost to you from printed materials to office supplies. Don't forget all of the hidden incidentals like toner or print cartridges. There's the wear and tear on your vehicle and nice looking clothes for personal appearances. You might even want to consider the estimated percentage amounts of expenses like your utility or phone bills that might be related to your promotional activity.
If you are out and about promoting and eating out when you normally wouldn't, then factor in those costs. Same if you take someone out or are entertaining for promotional purposes. If you pay for refreshments at a promotional event or have a bowl of candy set out for potential customers, then that's an expense you don't want to forget.
Keep a good detailed record of every cent you lay out for your promotional activity whether it's something you're doing at home or out on the road. It's often amazing to realize how much we spend on the things we do especially when it's cash out of pocket. If you don't write it all down or keep receipts you may wonder where all your money went at the end of the day.
The advice given here is not intended for actual business purposes. This is mostly just a fun calculation and you'd want to be careful about what you use for tax deductions. There are definite ramifications regarding expenses and taxes that can make a big difference when you file your returns. You want to take advantage of everything you can in order to increase your profit margin. Consult the tax experts on that aspect of valuating your assets and liabilities.
Before you delve into serious promotional and marketing efforts, you might want to grab a pencil and paper and start writing out lists and playing with figures. A lot of this activity might be based on guessing. The more you consider ahead of time, the better prepared you'll be when you start acting.
Do you watch your pennies carefully? When you consider the cost of your promotional activities do you consider the costs that are not most immediate to what you are doing? Do you hire a tax expert to assist you in filing your taxes?
Food for thought here Lee … Being self employed means that you end up thinking you have to do everything yourself …. I've passed on my accounts to a book keeper who puts in my tax returns, but I hadn't considered looking at promotion in this way and really costing it out. Thanks.
ReplyDeleteFil at Fil's Place - Old Songs and Memories
If it is personal expense, I do not count my pennies. But if it has to do with business, I have an eye on every coin. Nice post
ReplyDeleteYou're right that time costs money. For most, that's probably the biggest expense.
ReplyDeleteOne tends not to think of personal time as costing anything but you are right, it does cost money even if you don't physically outlay anything, it is still taking up your time and your time is definitely worth something.
ReplyDeleteI think people tend to forget about their time being worth something. When you pay for space, pay for food, pay for "anything" it is easily seen as an expense. Your time??? Not so much. But that doesn't make it so...
ReplyDeleteFil -- In all business a lot of money slips unnoticed through unseen channels. It makes more difference when we're smaller.
ReplyDeleteShine -- I'm not always so good with personal expense but it's a good place to start paying attention.
Alex -- You can't put an accurate value on time and so many of us waste so much of it.
Jo -- We wouldn't want to work at a job for free or without receiving some sort of benefit for doing so. The time we use for ourselves could have been time that someone else might have paid us for.
Robin -- Time is the most valuable of all of these outlays. I wish I had more time.
Lee
If I charged as much as my lawyer, I'd been worth billions about now! Great point to remember. Our time is worth noting.
ReplyDeleteSpeaking of making valuations, I've been making some data comparisons between a-to-z this year and last year, and I would have to say (at least for me) the value has gone down. Way down. I'm not sure I'm going to do a reflections post, yet, but I thought you might like to know what my personal data shows.
ReplyDeleteI count my pennies! Nice to meet and connect through atozchallenge. http://aimingforapublishingdeal.blogspot.co.uk/
ReplyDeleteI don't hire a tax expert but since my husband is also self-employed he knows how to handle the taxes. Our local writers' group has also had tax people and lawyers in to help us navigate those complicated waters.
ReplyDeleteI save money wherever I can. I do most everything myself. Its easier that way too.
ReplyDeleteI looks very pretty and a very serene spot.
Katy Did
Life's Ride In Between
You've mentioned quite a few 'hidden expenses'.
ReplyDeleteAny promotional activity must be done after a detailed cost-benefit analysis. I've seen that many businesses get into expensive, not-too-productive promotional activities only because of the 'me too' effect without doing any cost-benefit analysis.
I always think of this line of thinking when people tell me they drive to 5 different stores with their coupons. I tell them you're probably spending more money. You're certainly burning up more gas, adding wear and tear on your car, it's not time efficient for sure and unless those coupons are triple or better you're really not saving money.
ReplyDeleteSandy at Traveling Suitcase