To Buy or Not to Buy New Equipment at the End of the Year?
Running an Aesthetic Practice or MedSpa is all about providing the best services and support for your clients. Most of your clients likely have high expectations, which means that your team and your equipment has to be top-of-the-line. However, when it comes to upgrading or investing in new technology, timing can make a significant difference. In this article, we want to cover the pros and cons to consider before making a new purchase at the end of the year. If you’ve been debating about buying something substantial like a new laser, be sure to read this first.
Benefits of Buying Tech At Year’s End
Best Deals and Discounts
If you’ve ever bought a car, you know that automakers always have incredible deals when the newest models are ready to sell. Dealerships have to sell off the old inventory to make way for the new, which leads to substantial discounts and favorable lending offers for buyers. While aesthetic equipment is not exactly the same as buying a new car, the principles are similar. Manufacturers will be much more motivated to sell at the end of the year to reach specific quotas, so you will have a lot more leverage overall. Once you’re in the fourth quarter, be sure to ask about end-of-year deep discounts and bonus offers.
Offset Your Tax Liability
Because this new technology is a capital expense, you gain a meaningful advantage with the ability to write it off of your taxes under IRS code Section 179. Section 179 was created to assist small business owners to invest more economically in their businesses. For 2019 businesses can deduct the full cost of equipment from their 2019 taxes (up to $1,000,000), with a “total equipment purchased for the year” threshold of $2,500,000. Be sure to discuss the details with your accountant, but overall, this presents an ideal opportunity for your aesthetic business.
Plug a Hole in Your Service Offerings
Whether or not you decide to buy new technology will depend on a variety of factors. One compelling reason to move forward with a new purchase is that it will add value to your business and your clients. For example, almost all aesthetic businesses offer skin laser resurfacing services, as well as skin tightening. If you’re not providing those options for your customers, now is the perfect time to add them to your menu.
New Year, New Tech
Start the new year with a brand-new machine that will enhance your medical spa’s capabilities. Your clients will appreciate having access to improved result-generating technology, which can make you more competitive within your city. Additionally, your marketing efforts can get a boost from featuring your new services for the new year. Remind clients that you can better help them look their best in 2020!
Disadvantages of Investing in New Tech
While there are plenty of reasons to move forward with a new laser or upgraded equipment, there are some caveats to keep in mind as well. Here are a few potential setbacks that may make you reconsider.
Assuming that you want high-quality technology for your business, you may need to spend close to (or over) $100,000 in the process. While there are various financing options available, you need to be 100% sure that the equipment will benefit your practice or medspa and fits into your budget. It’s never a good idea to upgrade just to have the “latest and greatest.”
Lack of Demand
One of the worst things you can experience as a Physician or MedSpa owner is paying for an expensive device that never gets any use. One of the first questions you should be asking is, “do my clients want this service?” Start talking to your clients now to see whether they would be interested in this technology. Do your research and avoid wasting your time and money.
Uneducated Sales Staff
While budget and demand for a service should drive your decision-making process, you also need to be sure that you can sell it appropriately. You will need to take the time to thoroughly educate your aesthetic team so that they can answer all questions and feel comfortable discussing all aspects of the new technology and service. Having team members experience the service for themselves is extremely helpful!
No Marketing Strategy
It’s really easy to get into the mindset that “new equipment will drive sales.” However, the reality is that you need to market these services effectively to recoup your investment as quickly as possible. Just as you should be educating your team, you want to develop a comprehensive marketing strategy that capitalizes on market demand and decidedly pays off your equipment.
Substantial Ongoing Expenses
Realistically, new aesthetic equipment isn’t a one-time purchase. Many of these machines have built-in operating costs (e.g., filters, booster products), as well as various consumables that have to be in stock at all times. Don’t forget to factor these expenses into your purchase decision, or you could regret it down the road.
Other Considerations Before Buying New MedSpa Equipment
Talk to Other Owners – you can’t always trust the manufacturer to know how it operates in the field. Instead, talk to other owners to get a better sense of what to expect from a particular unit (i.e., usability, demand, pitfalls, contraindications, side effects, etc.).
Don’t Buy Impulsively – remember, new equipment can cost potentially hundreds of thousands of dollars. The salesperson has much more incentive than you to make a sale happen. Don’t be afraid to walk away and think about it. Even if a discount is on the line, there will be other offers in the future (…perhaps at your very next conference.)
Ask for Bonuses – typically speaking, negotiation is a necessary part of the buying process. Just as you shouldn’t be afraid to ask for a discount on the overall price, you should seek out bonuses as well. These add-ons can include items like extended warranties, free consumables, and/or marketing support.
Bottom Line: Take Advantage of Deals, But YOU Know Best
When asking whether you should buy aesthetic equipment at the end of the year, consider these points and then move forward with your decision. Always seek to understand your market as well as the advantages and disadvantages of the particular technology under consideration. Don’t be afraid of the back and forth that comes with the buying experience, and don’t be afraid to walk away if the purchase just doesn’t feel right to you. In the end, this is your aesthetic business and you know your team and clients better than anyone else!