Sales Account Planning 101 by Barry MacKechnie

Is your sales process structured in a way that ensures that you retain and gain large clients? If not, you should consider developing a sales account plan to focus your sales team on profitable clients, products and services. Developing and executing a sales account plan can bring significant revenue rewards. To develop your process, follow these nine steps:

Identify your sales channels, divisions, and types: Review your past two years of sales, sorting by areas and distinct sales group.  Distinct sales groups could include:

• Product line or product category
• Geographic sales area or sales region or country
• Customer type such as commercial, government, retail, etc.
• Divisions such as manufactured goods, distributed goods, etc.

Identify the top 20 to 25 percent of your current clients for each channel: Sort each distinct sales groups by total sales and identify your top clients in terms of profit margin and revenue.

Create a sales account plan for each large client: Create a unique sales account plan for each of your top clients, based on their sales history. A basic plan should: 

• Identify the sales team responsible for your client.
• Show historical sales information for that client.
• Estimate next year’s revenues for that client.
• Identify business development opportunities within the client.
• Create strategies to preserve current sales and generate new revenue from the client.
• Detail the steps and timing of your plan to realize the revenue goals for that client.

Identify target clients that you want to win in the current year: Every business needs to add new clients to thrive.  Create a profile for your ideal client.  Identify target clients for each sales area that you want to win in the current year.

Create sales account plans for each target client: After you identify target clients, create a sales account plan for each of them. A new business sales account plan should:

• Identify the sales team responsible for the targeted client.
• Estimate historical purchasing the target client makes from your competitors.
• Call the client’s purchasing department.
• Find out how they make buying decisions.
• Find out who makes the buying decisions and who influences the buying decisions.
• Create a “buying decision” organization chart of the target client.

Identify any sales opportunities by asking the target client if you can do it cheaper, better or faster, etc. Detail the steps and timing of your planned actions. Coordinate your sales efforts with your marketing department and website team to maximize your presentation.

Calculate your sales goals: One of the final tests of your sales plan is to add up all of the revenues from your current client and target client sales account plans.  Do the collective sales account plan goals meet your sales goals?  If yes, then you can execute the plans.  If not, then review the plans again and make revisions to your strategies to get more sales or revise the sales goals to match the account plans.

Execute the sales account plans: Review your plan weekly and confirm that your team is completing the action items on a timely basis and getting the expected results.

Revise your compensation programs to match your sales account plans: Many companies start a sales account planning process to correct antiquated incentive compensation systems.  Think about resetting your incentive, bonus or commission programs to coincide with team and/or individual achievements.

Mitigate the single point of failure in your plan: A good sales account plan is a well thought out strategy that is client-focused and creative. Some of the most successful sales account plans involve discussions and planning sessions with the client and also brainstorming with your staff by presenting questions such as “What would you do to steal your client if they belonged to your competitor?”

Sales account planning requires time, dedication and focus. But the rewards are increased market share, revenue and profits.


Barry MacKechnie, Founder and Owner of MacKechnie Consulting, Inc and has been advising CEOs and providing executive level services to clients and organizations for over 40 years. To see a sample account plan template, click here. You can contact Barry at barry@ceo-services.com

 

Bloomberg: U.S. Economy Grew at 5.7% Pace, Most in Six Years

The economy in the U.S. expanded at the fastest pace in six years as factories cranked up assemble lines and companies increased investment in equipment and software, Bloomberg reports.

The 5.7% increase in GDP, which exceeded the median forecast of economists polled by Bloomberg News, marked the best performance since the third quarter of 2003, figures from the Commerce Department showed today.

"The economy is still healing and improving," said John Silva, chief economist at Well Fargo Securities, who projected a 5.6% gain in GDP. "I think this is a sustainable recovery."

Click here to read this story in its entirety at Bloomberg.com.

Leasing Companies Laud Obama's Speech

Suspecting that the president wants to revive bonus depreciation, equipment lenders hail a reference in the State of the Union address.

David M. Katz, CFO.com | US
January 28, 2010

Heartened by a line in President Obama's State of the Union address Wednesday night, leaders of the Equipment Leasing and Finance Association issued a press release today praising the president's attention to "the need to invest in new plant and equipment for all businesses."

During a section of the speech that drew applause for its call for a stimulus to small businesses as a way to spur job growth, the president called on Congress "to provide a tax incentive for all large businesses and all small businesses to invest in new plants and equipment."

Leaders of the leasing industry read that as a clue that Obama's budget proposal, which is likely to be issued by Sunday night or Monday, would include an expense item enabling the funding of a revival of a bonus depreciation tax credit. "The conventional wisdom" to be derived from the speech, says David Fenig, ELFA's vice president of federal government relations, is that a bonus depreciation provision in the American Recovery and Reinvestment Act of 2009, which expired at the end of last year, would be retroactively extended for 2010.

Such a measure would accelerate straight-line depreciation back into the first year of equipment ownership. For example, a purchaser of equipment might normally be able to claim a depreciation of 20% for each year of the first five years of ownership. Under the measure that Fenig thinks the president will propose, the purchaser could claim a 50% depreciation in the first year. The aim would be "to encourage people to act now, not later," he says, adding that the cost of the measure could be about $30 billion.

The association will also be "looking closely" at the president's State of the Union proposal to stimulate lending by community banks, says Fenig. In the speech, Obama proposed "that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat."   

The presence of increased liquidity in community banks would "help companies borrow money and finance equipment," says Ralph Petta, the association's interim president.

Tax Law Changes for 2009

Published by Vistage View, the online portal of how-to and actionable business advice available only to Vistage members http://www.vistage.com/economy.

Tax Law Changes for 2009 By Vistage member Jeff Call, Managing Director of Personal Financial Services, Bennett Thrasher PC The federal stimulus plan and other legislation has created significant tax law changes that offer tax-savings on both personal and business tax positions. Below are explanations of the changes and strategies you can employ to take advantage of the new laws and complement your overall financial plan. Changes Affecting Businesses The stimulus plan, also known as American Recovery and Reinvestment Act of 2009 (ARRA) includes incentives for businesses and will create tax savings and additional cash flow that can be used to spur economic growth. Extended Bonus Depreciation and IRC Section 179 Expensing ARRA extends the additional 50 percent first-year depreciation through 2009. The act also extends the temporary $8,000 increase in the first-year depreciation limit that applies to passenger automobiles that qualify for 50 percent bonus depreciation. In addition, ARRA also extends the 2008 limits relating to Section 179 expensing. For 2009, the maximum that a taxpayer can expense using Section 179 is $250,000 (this amount is reduced dollar for dollar for the cost of qualifying purchases in excess of $800,000). If you are considering significant fixed asset purchases in the near future, it may make sense to accelerate these to the 2009 tax year to take advantage of these deductions. Net Operating Loss (NOL) Carrybacks The act allows small businesses (less than $15 million in gross receipts) to elect to extend the general 2-year carryback rule for 2008 NOL's to 5 years. Tax rates are expected to increase after the tax cuts enacted during the Bush administration expire in 2010. For NOL's generated beginning in 2009, it may be more beneficial to elect to carry the losses forward to reduce taxable income that is likely to be taxed at higher rates. Recently, Congress passed an amendment to the NOL provision and extended it to 2009 and to include all businesses, not just those with income under $15 million as was the law for 2008. A taxpayer may make the election for only one taxable year, and the amount of any NOL carried back to the 5th taxable year is limited to 50% of the taxpayer?s income from that year. Those that made the eligible small business election carryback for 5 years in 2008 are eligible to make the election again in 2009. Eligible small businesses are also not subject to the 5th year 50% income limitation mentioned above. Consolidated Omnibus Budget Reconciliation Act Continuation Premium Subsidy (COBRA) The law requires certain group health plans to allow terminated employees to continue to participate in the group plan for a specified period of time after separation from employment. ARRA provides that for a period up to nine months an assistance-eligible individual is treated as having paid any premium required for COBRA coverage if the individual has paid at least 35% of the premium. Thus, if the eligible person pays at least 35% of the premium, the group health plan must treat the individual as having paid the full required premium and the individual is entitled to a 65% subsidy on the premium. If, as an employer, you provide this subsidy, then you can claim a corresponding credit on your quarterly/annual employment tax return (Form 941). Tax Planning Tips for Businesses While 2009 tax returns are not due until April 15, 2010, the time to evaluate your 2009 tax situation is right now. Certain tax planning strategies can increase your cash flow, but you must take action prior to the end of the year. Strategies for Businesses with Increased Profits in 2009 If you expect your 2009 tax bracket to be higher than last year, look for opportunities to accelerate deductions or defer income. Deferring income to a year with a lower tax rate will decrease the taxes on that income. Similarly, accelerating deductions into the year with a higher tax rate will increase the value of that deduction. Opportunities to Defer Income Delay collection of business debts, rents, and payment for services (if operating on the cash method of accounting) Defer year-end compensation/bonuses to right after year-end Defer sale of capital gain property or take installment payments rather than lump-sum payments Postpone retirement plan distributions that are not required   Opportunities to Accelerate Deductions Make next year's charitable contributions before year-end Make deductible interest and property tax payments due in January prior to year-end Make Q4 state estimated tax payments prior to year-end (make sure that you will not be subject to the Alternative Minimum Tax for 2009) Accelerate alimony payments You may not be able to control some of the items above, but it?s prudent to identify where you have some flexibility in the timing of these items. Strategies for Businesses with Decreased Profits in 2009 If you expect the financial struggles of the past 15 months to put you in a lower tax bracket than previous years, you should look for opportunities to accelerate income and defer deductions. Hopefully 2010 will be a more prosperous year for your business and recognizing income during 2009 with the lower tax rate could provide significant savings. This timing strategy may not have a significant impact for your 2009 tax planning, but could have a major impact on your 2010 tax planning. Take Advantage of Tax Cuts Before They Expire Many of the tax cuts that were enacted during the Bush administration are set to expire at the end of 2010. As mentioned above, the billions of dollars spent on economic recovery efforts during 2009 will likely be paid for, in part, by tax increases on high net-worth individuals. While no one knows for sure how tax rates will change, these are some changes that might take place: Top marginal tax rate may increase from 35 to 39.6 percent. 15 percent qualified dividend and long-term capital gain tax rates may increase to 20 percent. Healthcare bill may impose a surtax of 5.4 percent on singles with Adjusted Gross Income (AGI) over $500,000 and joint filers with AGI over $1 million. High-income taxpayers may lose up to 80 percent of their itemized deductions (charitable contributions, real estate taxes, state income taxes, and interest ) if their income is high enough. Given these possible scenarios, revenue or income may be more valuable to you in 2010 than 2011. As you plan for the 2010 tax year, it?s important to keep these potential changes in mind. With likely changes in law coming, proactive tax planning is more important than ever. We encourage you to be in touch with your tax adviser regarding your personal tax planning strategy to determine the tools and techniques that will place you in the best financial position.

CEO Confidence Index Jumps Unprecedented 15 Points

CEOs Moving From Recession to Recovery

SAN DIEGO--(Business Wire)--

There is a new surge of optimism among Main Street CEOs, according to the
Vistage CEO Confidence Index. The Q3 Index recorded the highest quarterly gain
in economic confidence since 2003. The quarterly CEO Confidence Index rose to
84.9, up from 69.0 in the 2nd quarter of this year and 48.7 percent in the last
quarter of 2008. 

"Half of the CEOs in our survey believe the economic recovery has begun," says
Rafael Pastor, Chairman of the Board and CEO of Vistage International. "More
than 80 percent see their company revenues and profits increasing in the next 12
months. While Main Street CEOs do not expect the recovery to be easy, they are
adopting new strategies for the new economic landscape." 

CEOs cited targeting new types of customers and developing new lines of products
and services, as well as using social media and online marketing more, as their
top three strategies to adapt to the new economic landscape. Also, 43 percent of
the CEOs are currently doing or plan to do business internationally in the next
12 months, with Europe and China being the principal places to expand. 

Despite the renewed optimism, economic uncertainty and financial issues were
cited as the top two concerns of the Vistage CEOs. Only 11 percent find it
easier today than six months ago to obtain credit; 46 percent find it no easier;
and the rest don`t require credit. 

Health Care Hot Topic Among CEOs

The Vistage CEOs are essentially split on whether there should be federal
legislation to change the healthcare system, with 45 percent saying it`s
necessary and 49 percent saying it`s not. However, when asked about the
healthcare legislation currently being proposed, only 10 percent of the CEOs
said it would be good for their business, while 66 percent said it would be bad.


Employment Plans Remain Cautious

Although 39 percent of firms expect to expand their workforce in the next twelve
months, the most common expectation is that firms will keep employment at its
current level during the year ahead. Even among those firms that anticipate
hiring, most of the new jobs are expected to be filled after the start of 2010. 

Inflation Not Likely

Only 20 percent of the CEOs expect to increase prices during the next twelve
months; 63 percent expect to keep prices the same; and 16 percent expect prices
to decrease. This may be an indication that fears of inflation in the coming
year should be tempered. 

Confidence Varies By Industry

Among the industries surveyed, CEOs in the real estate and construction
industries have the lowest overall confidence in the current economy, with CEOs
in the services industry having the most positive outlook. CEOs in the wholesale
trade and manufacturing industries expect their firms` profitability to be, on
average, seven percent higher than the national average. Similarly, CEOs in the
services industry expect their sales to be seven percent higher than the
national average. 

The Q3 2009 Vistage CEO Confidence Index is a compilation of responses from
1,789 CEOs of small- to mid-sized companies in the United States, surveyed
between September 14-24, 2009, with a margin of error of 1.8 percentage points.
The quarterly Vistage CEO Confidence Index, established in 2003, is the nation`s
largest and only comprehensive report of their opinions and projections. 

about Vistage International 

Vistage is a CEO peer organization in 16 countries with nearly 14,500 members.
Collectively, Vistage members run companies with an estimated $300 billion in
revenues and employ two million people. In addition to their peer groups,
Vistage CEO members have access to expert resources speakers and receive monthly
one-to-one coaching from a mentor called a Vistage Chair. The sharing of
information in a Vistage group is completely confidential, allowing for the open
exchange of issues, ideas and solutions. For more information, please visit
www.vistage.com. 

Monthly Leasing and Finance Index September 2009

The Equipment Leasing and Finance Association's (ELFA) Monthly Leasing and Finance Index (MLFI-25), which reports economic activity for the $650 billion equipment finance sector, showed overall new business volume for September declined by 30.9 percent when compared to the same period in 2008. For 2009, the MLFI-25 reported month-to-month new business volume increased 27.0 percent from August to September, from $3.7 billion to $4.7 billion. The MLFI-25 is the only index that reflects capex, or the volume of commercial equipment financed in the U.S. The MLFI-25 is a financial indicator that complements other relevant economic indices, including the monthly durable goods report prepared by the U.S. Department of Commerce, which reflects new orders for manufactured durable goods, and the Institute for Supply Management Index, which reports economic activity in the manufacturing sector. Together with the MLFI-25 these reports provide a complete picture of the status of productive assets in the U.S. economy: equipment produced, acquired and financed. The MLFI-25 reported receivables over 30 days increased to 5.6 percent as compared to 5.0 percent in August. On a year-over-year basis, receivables over 30 days increased by 60 percent. Charge-offs increased sharply to 3.0 percent from 2.1 percent in the prior month and rose by 157.3 percent compared to September 2008. This dramatic increase is attributable in part to a significant deterioration in credit quality reported by two responding organizations. Sixty-three percent of participant companies reported that fewer transactions were submitted for approval during the month, due to tightening underwriting standards and lower demand, according to supplemental data. Credit approvals remained stable at 67.9 percent when compared to the previous month; however they declined from 72.7 percent in September 2008. Total headcount for equipment finance companies decreased 1.9 percent in the August-September period. "We find encouraging the fact that the decrease in new business volume slowed in September after several months of steady decline," said Equipment Leasing and Finance Association Interim President, Ralph Petta. "However, this sliver of good news contrasts with the sharp deterioration in portfolio quality illustrated by the September receivables data," said Petta. A related index, the Equipment Leasing & Finance Foundation's Monthly Confidence Index, for October showed a slight increase to 54.3 compared with 53.8 in September. The majority of survey respondents believe business conditions will continue to stabilize over the next four months. For more detailed information on the Monthly Confidence Index visit www.LeaseFoundation.org About the ELFA's MLFI-25 The MLFI-25 index is released globally at 9:00 a.m. Eastern time from Washington, D.C. each month, on the day before the U.S. Department of Commerce releases the durable goods report. The latest Monthly Leasing and Finance Index, including methodology and participants is available below and also at http://www.elfaonline.org/ind/research/MLFI/ MLFI-25 Methodology The ELFA produces the MLFI-25 survey to help member organizations achieve competitive advantage by providing them with leading-edge research and benchmarking information to support strategic business decision making. The MLFI-25 is a barometer of the trends in U.S. capital equipment investment. Five components are included in the survey: new business volume (originations), aging of receivables, charge-offs, credit approval ratios, (approved vs. submitted) and headcount for the equipment finance business. The MLFI-25 measures monthly commercial equipment lease and loan activity as reported by participating ELFA member equipment finance companies representing a cross section of the equipment finance sector, including small ticket, middle-market, large ticket, bank, captive and independent leasing and finance companies. Based on hard survey data, the responses mirror the economic activity of the broader equipment finance sector and current business conditions nationally. The results of each MLFI-25 are posted on the ELFA website. ELFA is the premier source for statistics and analyses concerning the equipment finance sector. Please visit http://www.elfaonline.org/ind/research/ for additional information.

Participants in the ELFA MLFI-25: ADP Credit Corporation Bank of America Bank of the West Canon Financial Services Caterpillar Financial Services Corporation CIT De Lage Landen Financial Services Dell Financial Services Fifth Third Bank First American Equipment Finance GreatAmerica Hitachi Credit America HP Financial Services John Deere Credit Corporation Key Equipment Finance Marlin Leasing Corporation National City Commercial Corp. RBS Asset Finance Regions Equipment Finance Siemens Financial Services Susquehanna Commercial Finance, Inc. US Bancorp Tygris Vendor Finance Verizon Capital Corp Volvo Financial Services Wells Fargo Equipment Finance

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MLFI-25 New Business Volume
(Year Over Year Comparison)

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Aging of Receivables:

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Average Losses (Charge-offs) as a % of net receivables
(Year Over Year Comparison)

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Credit Approval Ratios As % of all Decisions Submitted
(Year Over Year Comparison)

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Total Number of Employees
(Year Over Year Comparison)

Successful companies in social media

Successful companies in social media act more like party planners, aggregators, and content providers than traditional advertiser….

Stats from Social Media Video (sources listed below by corresponding #)

1. By 2010 Gen Y will outnumber Baby Boomers….96% of them have joined a social network
2. Social Media has overtaken porn as the #1 activity on the Web
3. 1 out of 8 couples married in the U.S. last year met via social media
4. Years to Reach 50 millions Users:  Radio (38 Years), TV (13 Years), Internet (4 Years), iPod (3 Years)…Facebook added 100 million users in less than 9 months…iPhone applications hit 1 billion in 9 months.
5. If Facebook were a country it would be the world’s 4th largest between the United States and Indonesia (note that Facebook is now creeping up – recently announced 300 million users)
6. Yet, some sources say China’s QZone is larger with over 300 million using their services (Facebook’s ban in China plays into this)
7. comScore indicates that Russia has the most engage social media audience with visitors spending 6.6 hours and viewing 1,307 pages per visitor per month – Vkontakte.ru is the #1 social network
8. 2009 US Department of Education study revealed that on average, online students out performed those receiving face-to-face instruction
9. 1 in 6 higher education students are enrolled in online curriculum
10. % of companies using LinkedIn as a primary tool to find employees….80%
11. The fastest growing segment on Facebook is 55-65 year-old females
12. Ashton Kutcher and Ellen Degeneres (combined) have more Twitter followers than the  population of Ireland, Norway, or Panama.  Note I have adjusted the language here after someone pointed out the way it is phrased in the video was difficult to determine if it was combined.
13. 80% of Twitter usage is outside of Twitter…people update anywhere, anytime…imagine what that means for bad customer experiences?
14. Generation Y and Z consider e-mail passé…In 2009 Boston College stopped distributing e-mail addresses to incoming freshmen
15. What happens in Vegas stays on YouTube, Flickr, Twitter, Facebook…
16. The #2 largest search engine in the world is YouTube
17. Wikipedia has over 13 million articles…some studies show it’s more accurate than Encyclopedia Britannica…78% of these articles are non-English
18. There are over 200,000,000 Blogs
19. 54% = Number of bloggers who post content or tweet daily
20. Because of the speed in which social media enables communication, word of mouth now becomes world of mouth
21. If you were paid a $1 for every time an article was posted on Wikipedia you would earn $156.23 per hour
22. Facebook USERS translated the site from English to Spanish via a Wiki in less than 4 weeks and cost Facebook $0
23. 25% of search results for the World’s Top 20 largest brands are links to user-generated content
24. 34% of bloggers post opinions about products & brands
25. People care more about how their social graph ranks products and services  than how Google ranks them
26. 78% of consumers trust peer recommendations
27. Only 14% trust advertisements
28. Only 18% of traditional TV campaigns generate a positive ROI
29. 90% of people that can TiVo ads do
30. Hulu has grown from 63 million total streams in April 2008 to 373 million in April 2009
31. 25% of Americans in the past month said they watched a short video…on their phone
32. According to Jeff Bezos 35% of book sales on Amazon are for the Kindle when available
33. 24 of the 25 largest newspapers are experiencing record declines in circulation because we no longer search for the news, the news finds us.
34. In the near future we will no longer search for  products and services they will find us via social media
35. More than 1.5 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared on Facebook…daily.
36. Successful companies in social media act more like Dale Carnegie and less like David Ogilvy Listening first, selling second

Use Equipment Leasing to Gear Up for the Recovery

Gearing Up for the Recovery:
Economist Brian Beaulieu Projects Oct. 2009 Recovery

By Paul Diamond, Web Editor, Vistage International

Economic Projections
Based on the movement of leading economic indicators:

• The recovery will begin around October 2009, and will be so mild that most Main Street businesses won’t trust that it’s a true recovery until we are three to six months into it.
• 2010 should show a tepid, mild recovery, while the pace picks up in 2011-12.
• U.S. housing markets will reach a low in late 2009 when prices flatten. Home values may begin to rise again in 2011.
• Disinflation (a decrease in the rate of inflation) or deflation is likely to continue into 2010, while inflation returns in 2011-2012.
• Unemployment will peak in early 2010 above 9 percent nationally. Job growth should begin around September 2010.
• Credit conditions will improve somewhat in 2010, when we should see renewed lending at low interest rates.
• Commodity prices will go up in late 2010 and into 2011 when industrial production will have recovered to half its 2007 levels.

Actionable Advice to Business Owners
Beaulieu recommends that business owners take the following actions:

• The beginning of 2010 will be a golden time to expand your operation. New and used equipment will be inexpensive, real estate will be inexpensive, interest rates will be low. Start planning your expansion now.
• Borrow as much money as possible in 2010, as conditions may not be as favorable in the years to follow.
• If you lease business space, renegotiate your contract as vacancy rates goes up later this year.
• Hire some of the exceptional talent that will be available through 2010.
• Cease activities that don’t create profit, such as seminars, services or other things that lose money for your company.
• Eliminate products that aren’t profitable. Get rid of that which doesn’t advance the growth of your company.
• Ramp up your marketing and advertising.
• If you need to reduce your workforce, do it now.
• Find clients in these resilient sectors: energy, “green,” hotel/motel, water, healthcare, funeral services, alcohol, security, legal services, food distribution, water purification/distribution, electricity, natural gas distribution,  education (community colleges in particular), pet products, and leisure.
• Look for clients or ways to sell your product in western Canada, Brazil, and Australia. These countries are positioned for strong future growth. Russia and China are not positioned for near-term growth.
• Review your competitive advantage. Define it and tout it.
• Lead with optimism. Be the chief cheerleader.
• Communicate your company’s future clearly.
• Don’t just maintain the status quo. Take risks and be courageous.
• Celebrate victories, even small ones, with your people. Treat your best employees well or they will defect during the recovery.
• Monitor your cash position religiously. Take all necessary actions to maintain a positive cash flow.
• Learn to compute your company’s “12/12 rate of change” so you can project where your revenues are going.

Actionable Market Advice
There’s no huge stock market rebound on the other side of this downturn, only a long, slow climb out.  In fact, Beaulieu projects the stock market will take 15 years or more to recover the territory that we lost.

• People should put money into specific equities, in contract to a broad index fund that moves with the overall market--unless you are in your 30’s or younger. 
• People within 10 years of retirement should go for safe fixed income investments, perhaps setting up bond ladders.
• In the post-2010 world, avoid bond funds as they will be under long-term negative pressure.
• Consider using inflation hedges such as real estate and alternative investments like commodities.
• Pay your taxes now because they are only going to be going higher in the future.

As a final thought Beaulieu reminds us: “It took only two years to crumble to where we are today, but it will take us many more years to get back to that peak. It was a bubble and you don’t recreate a bubble quickly, nor do we want to.”

Tax Benefits of Financing

Business Equipment Purchases

Business owners who buy capital equipment - machinery, computers, and other tangible goods, usually prefer to deduct the cost in a single tax year, rather than a small amount over a number of years. Federal tax law lets small businesses accelerate depreciation under tax code Section 179 for qualified property.

Benefits of Non-Tax Leases

Non-Tax/Capital Lease. The benefit of this lease type is the ability to take advantage of IRC Section 179 and expense up to the amount allowed for the year that the equipment is installed. You may depreciate any excess on the depreciation schedule for that particular asset. Examples of this type of lease include $1.00 Buyout, 10% Purchase Upon Termination (PUT).

Example: Equipment is financed and put in use in 2008 and the cost is $275,000. Using Section 179 and assuming a 35% tax bracket, net savings on the equipment would be:

Equipment Cost:	$250,000
1st Year Write Off Section 179 ($250,000 is maximum write-off)	$250,000
50% Bonus ($275,000-$250,000 = $25,000 $25,000 x 50% = $12,500)	$12,500
Regular MACRS ($12,500 x 20% = $2,500)	$2,500
Total 1 st Year Deduction ($250,000 + $15,000 = $265,000)	$265,000
Tax Savings Assuming Rate of 35% ($265,000 x 35% = $92,750)	$92,750
1st Year Bottom Line Equipment Cost ($275,000 - $92,750 = $182,250)	$182,250