What Does the IRS Think of Your Emails?
"Depends upon what you do with them, dahlink."
Business (or entrepreneurial) email accounts are part and parcel of a business. Business emails are, increasingly, a main link in communication with vendors and clients. In this article, I'll offer information about business email accounts and how they may differ by brand, their value, and their importance as an asset in the sale of a business or even upon the death of a business or its owner. Please remember the focus is on entrepreneurs and small business owners.
How Your Emails are Married to Your Business
When you start a small business, you are faced with a number of digital details that require thought, feedback, testing, and integration into your business plan.
The name of the business
A domain name
Your company colors
Your website design and content
Hosting
Setting up an email account
You might want several accounts if you are working in a partnership or as a nonprofit with a board. Your email account(s) are married to your business on the front end, as the emails you send out need to conform to the overall design of your business from the business name to the font you might use across the board.
Therefore, your company brand is important in this situation.
If you are using a personal brand that people connect to you as an individual, you have a different asset than the person who develops the faceless or business brand. Personal brands are difficult to sell as assets, but their value shows when that brand is passed on to a family that wants to continue a personal brand success story (think influencer or Oprah, going from one end of the spectrum to the other).
The faceless brand is just that -- if you show your face, you are a personal brand now, and the value of your business as an asset that you can sell goes down. Take a tip from hotels or other businesses that work within teams...include your name, your position, the company name, qualifications, your company logo, and all other essential information such as address and phone numbers. Learn more about email signatures for hotels at Gimmio.
The business brand is the most sellable asset among the three brands. The email signature works along the same lines as the faceless brand. The business email is part and parcel of the assets you sell as a business entity, especially if those emails contain valuable information…like email addresses.
Despite the differences among the brands, there is one similarity...the fact that your email reflects your brand. The connectivity between your brand and your email is absolute. Once you develop this mindset, you can see how your business email becomes an asset that demands care and respect.
Points to Keep that Email on Track
A business email user can stray at times, including the use of that email for personal business. Although it's especially messy for the person who develops a personal email account, that's not the end-all or be-all for this brand. Just remember to keep the personal stuff for another private email account. For all brands, you might want to develop some skills that can help you keep that email in line:
Professionalism: Using a business email account that matches your domain name can give your business a more professional image and establishes trust with vendors and customers.
Branding: A business email account with your company name reinforces your brand identity and helps customers remember your business and makes it easier for them to contact you.
Credibility: A professional email address can help build credibility with customers, clients, and partners.
Organization: Using a business email account across the board can help keep your inbox organized and separate from your personal email (set up a new account for personal email if your email happens to be the one you use now for a personal brand). This can make it easier to manage your emails and respond to important messages in a timely manner.
Overall, a business email account can be an important asset to a business by helping to establish credibility, reinforce branding, and improve communication and security.
What Happens Next...
What happens if the business fails? What if you die? What if the business is successful beyond your wildest dreams and you want to 1) expand; 2) sell? What if…
First, the IRS does not consider business emails as a business asset, because business email accounts under a domain name do not have any economic value (the domain name does, however). They are simply a tool that businesses use to communicate. So, if you sell a business, you don't need to worry about adding email to asset classes, because the domain name takes care of that for you by offering emails through that domain.
However, emails can be valuable in the sense that they can contain information that is important to a business, such as customer contact information, financial records, and trade secrets. Businesses and entrepreneurs should take steps to protect their emails from unauthorized access and to back them up regularly. Print them or send them to a designated archive and learn about encryption if you need it. Microsoft offers a comprehensive article about small business email protections.
Buyers may want to include all your business email information as well as any email lists you maintain for customers as well as for vendors. While the IRS also doesn't consider email lists a business asset, the buyer might disagree depending upon the freshness of that list. Email lists are used to generate revenue, collect feedback, and to market products and services. If a business is selling their email list, then the revenue created by that sale is, indeed, income if not a class asset, and reporting that income is mandatory for any entrepreneur or small business.
Photo by Microsoft Edge on Unsplash
In the End…
Your domain email names are not important. What is important is the content you’ve stashed away in those emails and responses. Take a bit of time this next month (after you’ve filed those taxes) to clean up that business email. Categorize, organize, and develop email lists in spreadsheets. What you are doing with this activity is developing an asset that is, indeed, valuable. Content matters.