Mar 11, 2020

What Is (and Isn’t) Considered a Marketing Expense?

Every successful business is built on a successful plan. And one of the most important aspects of your plan will be the marketing strategy. After all, if people don’t know about your business, they will never be able to pay for your goods or services.

As you strategize your marketing efforts, you’ll need to pay close attention to your budget. There are diverse ways to approach your marketing budget. One popular method is to let the expenses lead the charge. As you list out key marketing executions, you’ll keep a running tally of the cost. Then you take the total cost and adjust your budget to accommodate your chosen marketing efforts. This aggressive approach makes marketing a priority, sometimes at the expense of other aspects of your business.

An alternative way to approach your budget is by earmarking a percentage of your revenue for marketing. This approach is a more reactive way of handling your efforts, as your strategy will need to be reigned in any time revenue decreases. But this method helps contain costs and ensures that the other areas of your budget won’t be infringed upon by marketing expenses.

Regardless of your chosen budgeting approach, it’s important to understand the various expenses you should include in your budget.

“Marketing expenses are an important consideration for all businesses because marketing is a primary business function that creates a customer for the business,” explains a business finance report from the Houston Chronicle. “It’s critical for business owners to understand the significance of marketing expenses, its accounting definition, marketing expense management, and tax treatment.”

This guide will introduce you to many of the common marketing expenses that small businesses deal with. It’s not intended to be a comprehensive list. Each business has unique elements and needs.

As you formulate your marketing budget, take special care to identify each expense that will fall within it. This thoughtful approach to finances allows you to track the impact of each marketing effort so you can determine the ROI and assess whether you want to keep it as part of your overall strategy.

 

About the author

Grant Olsen
Grant Olsen
Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

Comments

Bookkeeping for your small business.

Simplify your bookkeeping and save money