November 2009

Reasons to Buy Equipment Now

By Larry Kopsa CPA

Even though economists say the recession is almost over, now may just be the time for you to purchase equipment. Here are four advantages of purchasing equipment now:

(1) Manufacturers of equipment are motivated. Because of the recession, there are less new salons coming on board and the existing salons have been slow to remodel.

Because of this, manufacturers are motivated. They are offering some really good prices right now on equipment in order to turn some of their inventory into cash. This may not last. As salon revenues continue to improve and as the country comes out of this recession, we will not see these discounts lasting forever. Now is the time.

(2) New equipment can improve your sales. Over the years, salon owners were questioned on the impact that remodeling or sprucing up the place has had on sales. My experience is to yet have one person say their sales have not increased because they purchased new equipment.

I’ve even heard clients say, “I suppose prices are going to go up now.” Or maybe it’s just the attitude the staff has. Whatever the reason, remodeling every once in a while can help improve your sales and your bottom line.

(3) There are some tax advantages for purchasing equipment. In 2009, you can purchase up to $250,000 worth of equipment and write it off in this year’s purchase.

For example, if you had $50,000 of income and that income was costing you 35 percent in taxes, you would have a tax bill of $17,500. At the same time, if you purchase $10,000 worth of equipment, this would save you $3,500 in taxes and bring your tax bill down to $14,000. If you purchase $50,000 worth of equipment, you would have no income tax.

(4) Keeping or attracting staff. Keeping your professionals motivated and attracting new people to your salon, is always a constant challenge. Having a new look helps keep people happy and puts you ahead of your competition.

Of course, everyone’s situation differs based on their personal circumstances. With this in mind, it is important that you consult with your personal tax advisor before you utilize any of this information.

Kopsa Otte is the nation’s premier CPA firm specializing in salons and spas. For more information visit or call 1-800-975-4829.

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