According to applied statistics in business and economics, for every dollar we spend on advertising and marketing, we spend $1.60 in taxes. This is a great way to see how much money we’re spending on marketing and advertising for your business and how much we could be saving.
The number is a little misleading in some ways because it doesn’t factor in things like the cost of things like labor. But to give you a couple more numbers, imagine that an ad was costing $100,000 and an ad was costing $1,000,000. If you had to pay someone $500,000 to make one ad you could actually save $500,000 in taxes.
In business we can have these tax savings to help our company with things like payroll, marketing, and advertising. But in economics, the savings are so much larger than the taxes. In fact, if we spent the same amount on marketing as we do buying new equipment, then we could save hundreds of thousands of dollars per year in taxes and taxes alone.
What an ideal situation! When we spend money on marketing, we can save all that money in taxes! But, what is the perfect situation? No one is making money on ads or marketing. What is the perfect situation? We are making money on other things and taxes are the best way to keep that money in the company.
If you’re like me, you’re a statistic. You know that if you buy a car and keep it for three years, the engine will still work and that even the paint will look pretty good. So why not keep that car forever? I mean, the savings would be huge. But I also know that if I did buy a new car and it was the same make, model, and year, the tax bill would be higher.
In economics, “statistics” is a term used to describe the study of how many things go wrong in a given year. But it also describes the way we think and act in a given year. So if you want to make money in business, you need to take the best ideas from all the different ways things go wrong in a given year and make them work well.
So how can you make statistics work for you? You apply some basic stats to everything you do and see what you do better or worse. Then you tweak your numbers and apply some more stats to see if they make your actions better or worse.
Applying statistics involves a lot of work. So much so that some people think that making the math easy to understand, and making the math easy to understand, is not enough. But it is.
In business and economics, if someone is making too many things they can’t control, that can be a problem. They end up having to do lots of things that make them worse, which can lead to more problems in the future. So it makes sense that applying statistics to a company’s decisions can help them avoid that problem. The same logic applies to your own decisions.
So it’s no surprise that applied statistics can help make things easier for your company to do. And since we’re all data geeks, I thought we’d get to that topic in a separate blog post.