Chocolates at year-end...
I used to write a lot (magazine articles for Inc. and PC World and Lotus Magazine... and also computer and business books for basically all the computer book publishers).
Early on, in the late 1980s, I sent my editors at Lotus Magazine gifts. Boxes of Frangos chocolates. They basically called the next day and bought a bunch more articles. So I put two and two together... and started sending chocolates to pretty much all the editors at all the magazines and all the publishing houses that I worked with.
People definitely loved getting holiday gifts from me. But after a few years, as a small business, it really snowballed into a huge headache. I had, essentially, 6-8 customers (at most) and maybe 150 people on my holiday business gifts list.
Invariably, I would forget someone... and then have to scramble to get them their own box of Frangos...
Then there'd be the person who hadn't bought anything for years... or who had been openly antagonistic... yet dropping a person from the list seemed like adding fuel to any simmering fires.
And I knew I was sending Frangos to people who weren't even at the publisher anymore but I just didn't know it yet... Like Jamey in royalty accounting, or whatever...
Because of all these headache factors, when I started my next business, running a CPA firm again in the Seattle area, I very consciously decided not to use gifts.
I wanted to attract and keep customers because of my product quality and personal service... and if that's not enough, so be it.
BTW, business gifts are deductible as business tax expenses only if there are de minimis or clearly advertising materials. I think the ceiling is $25 per recipient. So you can't guy your best customer's daughter a $200 place setting for her bridal shower and then deduct it.
Steve Nelson, Publisher, www dot llcsexplained dot com and www dot fasteasyincorporationkits dot com.
Last edited by SeattleCPA; 28th April 2007 at 12:21 PM.