Step 1- Get the right laser!
This may sound obvious, yet it’s not. How many times have we seen well-educated people sacrifice the potential success of their dreams by selecting a laser that can’t possibly perform to the needs of their business. Sometimes, this is because they place their trust in a sales person who has little knowledge of, or worse… misrepresents the capabilities of their laser. This is a tragic mistake, one in which the business owner pays for since it can seem almost impossible for a laser company to take back a device and refund your money.
This mistake is particularly prevalent in the world of Used Lasers. These devices are often sold by third-parties who have little-to-no access to used parts from the original manufacturer. You’ll be told something similar to, “the laser was only driven on Sundays by a little old lady who lovingly maintained the laser every step of the way.” The truth more closely resembles, “I have no idea about the history of this laser. It was traded in by someone whom I have never met, to someone I have never met, and in fact, I have never actually seen the laser beyond photos placed on a used laser site on the internet. However, to prove my confidence in the device, I’ll give you a 90-day warranty. If anything breaks, I’ll gladly send a friend of mine to look at your laser- he can’t get manufacturer’s parts to fix it- but he’ll come take a look ‘cause we care!”
Well good luck with either scenario. We’ve created a document which addresses the key considerations when purchasing a laser. We can’t say it enough:
- Find a company you can trust,
- Find a laser that’s configured to your needs,
- Take advantage of the appropriate and complete training offered, don’t limit your business to training that’s simply on the ‘button-ology’ of the device you are purchasing,
- Understand the capabilities of the Service team that supports your new laser, and
- Purchase your laser from a company with product offerings in each segment of the market to avoid the ‘one-size-fits-all’ mentality. After all, if all I have is a hammer, then everything looks like a nail!
At the end of the day, the most important decision to unlocking the potential in your new Laser Tattoo Removal business is this:
Get the right laser!
Step 2- Use leverage to generate profits!
Forget about the acquisition price of the laser, even if you have the capability to pay for it in cash. Let me say that again: forget about the acquisition price. Instead, focus on your monthly payment.
First, a laser purchase is unlike a house or car purchase. A laser is a tool to make money. Your strategy should be to conserve capital so you can invest in marketing your new business, and to acquire the right technology at the right monthly payment. It’s all about cash flow:
Can I perform enough treatments at my treatment price so I generate more revenue than my laser payment?
If the answer is no, then you are setting yourself up to fail.
However, if I do two 15-minute treatments per day, Monday through Friday, and charge $200 per treatment, I generate $8,000 per month in revenue. Even if my laser payment is half that, I have generated $4,000 in contribution margin for my business. That’s a great start, and doesn’t require spending $100,000 to generate. You are, in fact, using leverage to generate profit, and this is what successful businesses do.
In addition to conserving capital, there are a couple other things to consider:
- When structured optimally, your laser can essentially pay for itself. Remember, it’s a tool your business will use to generate revenue.
- There may be tax benefits to your business when you finance your laser. As always, you’ll want to consult with your tax professional. Yet, we have witnessed many successful businesses deduct monthly payments from their taxes as operating expenses, ultimately lowering your overall cost.
Financing your laser can have hugely positive ramifications on your business. The benefits are clear.
However, it is nowhere near as easy to do as many laser companies claim. Let’s be real for a moment. All lenders (banks, finance companies, etc.) are in business to make money. They so this by deploying their assets (money) to businesses that they judge will successfully repay them, plus interest. If, heaven forbid, the business does not repay the bank, the bank will sell the secured asset in order to satisfy the obligation. When loaning money on a home or automobile, banks have well established ways to judge whether someone will successfully repay the loan. If they are wrong, and they must sell the home or car to satisfy the loan, they have well established relationships with companies that sell homes or cars.
The same is not true with lasers. In many cases, a local bank may have a singular experience in loaning money to a Laser Tattoo Removal business, and they may have zero resources who can monetize a laser. We have often witnessed new laser owners waste weeks, and sometimes months, speaking with their local bank who desires to help them, only to deny funding. It’s not that the risk is too high. It’s that the risk is unknown or difficult to quantify. For many local banks, that’s worst than high credit risk which can be addressed by high interest rates. Unknown or difficult to quantify risk almost always results in a denial of credit.
This is where Quanta Aesthetic Lasers comes in. We have a dedicated, in-house financing team with extensive relationships with laser-friendly financing sources. These professionals understand the Laser Tattoo Removal business and can appropriately quantify risk. This means that we get approvals quicker and at lower rates than available elsewhere. The process is completely confidential and transparent. You work directly with Quanta’s Financing professionals who provide a wide variety of options, including:
- Capital Leases
These leases allow a business to make monthly payments of principle plus interest over a specific period. At the conclusion of this period, the title to the tattoo removal equipment usually transfers to the lease payer who satisfies a relatively small obligation such as a percentage of the acquisition price (such as 5%) or a specific dollar amount (such as $1). The key with Capital Leases is that this residual is known at the time of lease origination.
- Operating Lease
Similar to a Capital Lease, the business will make specific monthly payments for a specific period of time. At the conclusion of the lease, the equipment may be returned without further obligation or the business may choose to pay the fair market value of the equipment at that time. This fair market value is not fixed at the time of lease origination. Operating leases can have favorable tax treatment and are sometimes referred to as “Off-Balance-Sheet Financing” since they do not appear on the Balance Sheet of a business. Instead, the monthly payments are simply deducted as an operating expense on the business’ Income Statement.
Quanta’s Financing professionals stand ready to assist you in understanding, and securing, the best financing that is optimized to your needs.
The bottom line:
- Quanta has significant experience and expertise in helping a wide range of customers in financing a laser for tattoo removal. In our experience, its important to:
Get the right laser,
Conserve capital, and
Work with Quanta to get the optimal financing for your needs.