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Local SEO Cost
Example and client test case
Local SEO Service ROI Analysis.
Investment Overview
For your local SEO service, you are investing £300 per month to drive online visibility and generate leads.
Over a six-month period, this totals an expenditure of £1,800.
Proof
1
Lead Generation and Conversion
In six months, one clients local SEO efforts have resulted in:
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27 online enquiries
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155 phone calls
With an average closure rate of 50% for online enquiries and 20% for phone calls, this translates to:
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13.5 closed deals from online enquiries
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31 closed deals from phone calls
Disclaimer: While the closure rates presented are based on actual enquiries for the client's services, results may vary for other businesses.
2
Revenue and Profit Calculation
For this client the average sale value per closed deal is aprox £2,000.
Therefore, the total revenue generated from these
44.5 closed deals is £89,000.
Given a profit margin of 30%, the total profit generated over six months is: £89,000×30%=£26,700
3
Conclusion
Over the course of six months, this local SEO solution has produced an outstanding ROI of 1,383%.
This indicates that £13.83 has been made in profit for every £1 invested in SEO and a turnover ratio of £49.44 to every pound. This proves that your local SEO efforts were successful in increasing revenue growth and profitability significantly.
4
Advantage of Tax Deductibility
The £1,800 total SEO expense can lower the taxable income, assuming SEO services are tax deductible.
Here's a condensed example to show how much money is saved on taxes:
Business 19% tax rate (standard rate for the UK)
Savings on taxes: £1,800 * 19% = £342
A Synopsis of the Financial Benefits
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Earned Income: £89,000
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Made A Profit Of £26,700
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1,383% is the return on investment (ROI).
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Ratio of Turnover to $1 Spent: £49.44
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Tax Reduction on SEO Expenses: £342
In Summary
Investing in SEO gives major tax benefits in addition to generating large revenue and profit. For every £1 invested in SEO, the company makes £49.44 in revenue. Better more, the cost of SEO can be subtracted from taxable income, saving much more money. This illustrates the general cost-benefit and effectiveness of employing SEO services for businesses.
Disclaimer: Seek advice from your own tax adviser
4
Finally
The client example shown here is a long term client that has no social media interaction and has no technical knowledge of online marketing.
If this client interacted online through social media we could expect a substantial increase in these figures.
Disclaimer: This client example showcases a dependable customer that has built a solid brand identity both online and off. Even if it's not a flawless illustration, it shows what's possible when perseverance is used.
More Tax Information
In the framework of UK tax legislation, marketing and advertising expenses, including SEO services, are normally tax deductible as long as they are "wholly and exclusively" for company reasons. This means that the entire amount spent on SEO can be deducted from your taxable income, lowering your total tax liability.
Using the example provided:
Monthly SEO costs £300.
Total cost for six months: £1,800.
If you spend £1,800 on SEO services over six months, the entire amount is tax deductible, as long as it fits the standards specified above.
Example of Tax Deduction Calculation
Total SEO cost over six months: £1,800.
Corporation Tax Rate: 19% (standard rate in the UK).
Tax savings = £1,800 multiplied by 19% is £342.
Tax savings = £1,800 x 19% = £342.
By utilising SEO services, not only can you achieve significant ROI and revenue generation, but you also benefit from a tax deduction, saving £342 on your tax bill.
For further details, consult with a tax professional or refer to HMRC guidelines on business expenses
(Checkatrade) (The Balance) (Quarata Consulting).
