Making the Best of Tough Times May Mean A New Laptop?
Published July 2009
Buying new IT equipment might not seem at first glance like the most logical way to help your business during these tough economic times but with a second look you may be surprised at why 2009 might be exactly the best time to acquire new technology.
Taking Advantage of Tax Changes
To start with, the federal government just gave everyone a big reason why, in the recent budget … saving money. The Capital Cost Allowance (CCA) is a tax deduction for small business that allows you to write off the cost of an IT purchase at a 55 per cent declining balance capital cost allowance against your business taxes. As of last month that write off can now be taken at 100 per cent in the first year the asset is put into use! Small business owners will be able to realize this rebate when they file taxes for 2009, a year when making your capital go farther is key.
Cash flow is always a prime concern, especially in times when credit is tight, so even firms that don't have the upfront capital now can leverage leasing to purchase technology and still enjoy the 100 per cent CCA allowance. A number of lease companies have low or even no interest lease offerings for small business technology purchase today.
When you combine the tax benefits with the fact that many computer products, printers and software have never been better priced you can understand why a "buy now" mentality might actually be a smart business move for many. The average price for a standard Intel notebook three years ago was well over $1000.00. Today it is under $1000.00 and there are Netbook products - like our S10e - at the sub $500.00 level shipping today.
This isn't all about money either. IT products today meet many more environmental and power saving standards than hardware purchased just two years ago. Greenguard, EPEAT, and Energy Star ratings all add up to hardware that could draw as much as 20 per cent less power while running. That is a monthly cost savings that goes right to the bottom line, not to mention every kilowatt counts (because David Suzuki told us so!).
Keeping Employees Happy and More Productive
Cost alone is not the only reason why buying new IT equipment now could be a smart business idea. It is times like these when your business needs to be its most productive. If your team is working on outdated equipment they are more than likely frustrated which may impact their ability to do their job.
One of our customers, Lisa Shepherd, President and Founder of Mezzanine Consulting, a small marketing research and communications firm, knows what that means.
"When you have someone working on a computer that crashes when they are writing a big report, it doesn't keep them in a good frame of mind. Equally true is that you now have a frustrated employee who is also taking too long to do their job productively. Add to that the fact that newer PCs and other tools can actually run more software and provide better performance and you start to question why staying with the status quote isn't a negative for your business," said Shepherd.
Keeping Your Options for Cost Reduction More Open
Another consideration that some business owners face is how to make their team more mobile or to create the options provided through a flexible work environment. For many business owners, rent can be one of their biggest cost factors. By going mobile and providing more flexibility for your employees, you can reduce your footprint and reduce your costs. It can also help your employees reduce their commute time which in the end can help to increase productivity. For me when I am in the office I sit at a Hotel Station that is assigned to what every flexible employees are in that day, and let's face it, don't we spend some portion of almost every day in meeting rooms or on conference calls anyway?
Businesses that are fiscally viable enough to be considering capital expenditures this year must of course weigh all their options. Speak to your tax professional or accountant to determine what options are open to your firm, and make an informed choice. You might be able to strengthen your infrastructure and reduce costs long term by making some smart decisions now. If your competition doesn't or cannot execute on those same decisions, your firm may emerge stronger in the long run.
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Author Information
Stefan Bockhop is the Lenovo’s Director of Channel Sales and has held a variety of roles including business partner sales, direct sales, and computer retail.
