Archives for December 2013

There’s nothing better than throwing a holiday party for your employees, especially if you’ve had an excellent year and profits have been good. If you’re putting out quite a bit of money to do it, you’ll definitely want to write off the expenses on your taxes. While it certainly isn’t it illegal or immoral, keep in mind that the IRS has special rules when it comes to writing off entertainment expenses. If you use them or interpret them the wrong way, you may find yourself facing problems or fines down the road.

The simple fact is that entertainment is not only a necessary but regular business expense for many companies. The need to be in touch with your clients and show them your “human side” is vital to a strong business relationship. In many industries it’s also vital to network with people from related industries in order to generate more B2B business. In any case, most business owners believe that the expense of providing all of the food, drink and entertainment at these functions is deductible. But is it?

In order to be deductible any type of entertainment that you have, including an open house, parties and so forth, must come with some type of discussion about business not only before but during and after the event. If you throw a party simply for “goodwill” reasons your expenses are not deductible.

The one exception to this is if you throw a party for your employees and their families. A Christmas or holiday party of this kind is 100% deductible, even if you invite the general public. Interestingly, if you invite “friends” the money that you allocated to entertain them is not deductible.

If you want your party expenses to be deductible when you’re throwing it for customers or business associates, as we mentioned above, there must be substantial business discussions made including either a presentation, a speech a “reveal” or something else along those lines. Even then, the IRS rules for entertainment say that you can only deduct 50% of any of the expenses for said party.

If you invite employees of the company to this event than any of the money that you allocate for their entertainment, food and drinks is still 100% deductible. Of course it’s in your best interest to make sure that you have any and all documentation to prove exactly who was there, what was spent and how much everything ended up costing. If you send out invitations you definitely should keep a copy of one to show that it was for business purposes.

A good example is something like this; “You are cordially invited to attend the reveal of our new shake maker. Make sure to stay and get your drink on with us afterwards.” Even better is if you videotape the reveal as you can not only use this for excellent social media marketing but, in the event of an audit, you’ll have sufficient proof.

It’s also an great idea to keep a copy of the guest list and make a total of the different types of guests including customers, employees and friends. This is especially helpful if you’re going to need to allocate the expenses and explain them to your bookkeeper so that he or she can record the transactions properly.

Of course the best thing to do is make sure that your tax professional knows exactly what the party was about and who was invited.  In this way they can keep it separate from any other entertainment expenses that you might have during the year and make sure did that it’s recorded properly at years end on your tax return.

Many people outside of marketing think of a “Brand” as sort of this false cover that is given to a product or service in order to con them into buying something that they don’t actually want or, even worse, don’t need.

A savvy marketer, on the other hand, realizes that a brand is something that reflects and defines the values that a company cares most about, something that goes beyond profit margins and revenues. Indeed, the most well-loved and long-lasting brands are usually the ones that tap into the public’s consciousness and resonate with them on a much deeper level than most brands could ever hope to. Indeed, the very best branding is the kind where commerce and humanity meet in the middle. With that in mind, we have 3 Tips for you today that will help you to build a brand that people will (eventually) adore. Enjoy.

Tip 1) Define why you exist as well as what your product stands against.

The best marketers know one simple fact about branding; consumers don’t buy what you make, they buy why you make it. That’s one of the reasons that the iPhone and iPad were able to literally change the world, because Steve Jobs didn’t set out to build a phone or a portable computer, he set out to change the way people think about computing. Think about it. Coca-Cola doesn’t sell sugar water, they sell youth and fun and excitement. Tom’s of Maine doesn’t sell toothpaste and deodorant, they sell caring for the environment.

The question then is simply this; what does your brand stand for. What’s the story behind the people who started the company and what type of values and passions do they have. These things should form the foundation of any company and any brand and, in order to succeed, you should hire people that share these core values and beliefs. Amazon, Apple, Google, Tom’s of Maine and others have done this and have become wildly successful.

It’s also vital that your brand defines what it is against. You must know exactly what it is that you “hate” and how your product or service solves this problem. As much as you need to be passionate about what you are product or service can do, you need to be passionate about what problem it will eradicate. For example, Coca-Cola hates dull lives, Dyson vacuums hade vacuums that don’t suck and are clumsy and Apple hates computers that are boring. If you can define what it is that your brand will do away with, you will go far in building an affinity for it in the public eye.

Tip 2) Define your true, specific target market and forget everyone else.

Marketers know that people purchase products and services from companies that they can identify with. The best brands think beyond things like age or income demographics and go more for the feelings, habits and desires of their customers as well as their “self-image”. Indeed, the best brands delve very deeply into these factors by using customer surveys and marketing that hits home deeply with their intended market and, in some cases, may actually be unpopular with the rest of the population.

Apple computers is the one of the best at doing this. Apple doesn’t sell smart phones or tablets, they sell family, wonder and simplicity. The typical Apple customer swears by their iPhone or their iPad and wouldn’t think about purchasing another brand even though there are some on the market that are now arguably better. Apples marketing is absolutely fantastic in reaching their core market and is one of the reasons that, even after the passing of Steve Jobs, they are still one of the most popular brands in the world.

Tip 3) Be Consistent in every single phase of your marketing.

This may be the most critical Tip to creating a Brand that people adore. Your brands identity, including your slogans, logo, “look” and voice need to be extremely consistent over all of your marketing media. This consistency is what will build trust and affinity in the community and convince people that your company has integrity, all critical factors that are needed to convert a consumer into a customer.

These are things that the public can’t always see, by the way. For example, the way that your people answer the phone when someone calls, the types of charities that you sponsor and your return policies all must be consistent and reflect your brand’s core values. With the social media the way it is today, responsiveness has also become vitally important. Today’s consumer is connected 24/7 to the entire world and expects to be able to connect with your brand whenever and wherever they like. Indeed, studies have shown that upwards of 90% of people on social media will recommend their company they’ve had a positive experience with.

At the end of the day, the fact is that once you’ve defined your brand you make most of your business decisions much easier. It takes a good bit of work to get started and branding certainly isn’t a substitute for excellent operations and management, but excellent branding will make things much easier as your company begins to grow and become more popular. Indeed, brilliant branding is one of the very best ways to create a brand that people will adore and, once adored, things become significantly easier.