Financing - amortisation
Question from various customers in many conversations: They often mention the phrase: "A device that costs you nothing!" How is that to be understood? A joke?
Answer: We would be very happy to describe some of our thoughts and considerations on the topics of amortisation, cost-benefit or financing. May they be suggestions for you. And beforehand: It is not a joke!
a) Equipment investment
As a private consumer, one is inclined to constantly compare prices of, hopefully comparable, products and determine the supposedly cheapest one for oneself. As an entrepreneur, a rational cost-benefit calculation should be made, on the basis of which an informed purchase decision can be made. We want to help carry out this analysis and then prove the truth of the sentence "A device that costs you nothing!"
Let us assume that a fictitious practice would also like to offer permanent hair removal. This fictitious customer decides to purchase our professional diode laser 3D-ICE MAX PRO 3000 Watt 2500 at a gross price of 27,489.00 EUR (as of 10 / 2022). For this price, a monthly rate of 354.52 EUR per month gross is calculated (full amortisation, 48 months term, 10,472 € deposit, as of 10 / 2022).
Let us now look at the income side and calculate conservatively. After price research across the whole of Germany, let's assume an average price of 100.00 EUR for an average treatment for permanent hair removal. From this it is easy to see that you would need 3.55 customers to be able to pay the monthly leasing rate. Now, in every company there are other operating costs that have to be earned proportionately from each turnover. So we round up generously and realise that 4 customers a month for permanent hair removal will cover all the costs of the investment and the proportionate overheads. That is, in other words, only 1 customer per week. In any case, these 4 customers come to you 6 times in a rhythm of 4 - 6 weeks (for simple mental arithmetic), so that the extended device costs are already covered for at least half a year. Even with the second customer in a week, you are already generating a profit for yourself.
Summary: You have an expensive, high-quality device in your practice, you have paid nothing for it and after a month (for this device!) not a cent has disappeared from your wallet. So we mean that you are using a device that costs you nothing.
Now please play with the numbers yourself. For example, you may get twice as many clients by half the treatment price, you may get lower rates by a longer term and even fewer clients are enough to cover the costs, or the tax-saving effects of slightly changed contracts also contribute to cost recovery.
b) Spare parts investment
When purchasing spare parts or consumables, the consideration is somewhat different. Once a device has been purchased, you don't earn more with it just because a wearing part has to be replaced. So wearing parts or spare parts actually cost something. For an exemplary consideration, please imagine the following situation in our fictitious practice.
With a diode laser for permanent hair removal, a laser handpiece must be replaced when the specified service life (50 million shots) is reached. This high-quality 3-wavelength handpiece costs 9,499.00 EUR (gross) for our hair removal laser 3D-ICE MAX PRO 3000 Watt 2500. If we assume that the handpiece delivers 2000 shots per treatment to each customer (e.g. on a large back), 25,000 treatments can be carried out. If each customer pays 100.00 EUR for hair removal on the entire back, a turnover of 2.5 million EURO is achieved with the device during the lifetime of the handpiece. This puts the price for the replacement of the new handpiece into perspective. Whatever personal calculation you make for yourself, put aside only 10 cents per treatment and the handpiece is more than paid for.
If you also want to finance the spare part, the same considerations as we have described above under a) apply. You will need about 4 customers per month to pay the financing instalment if a term of 4 years is chosen. The financing term here should not be longer than the lifetime of the spare part.
Again, please use your own figures to calculate the number of shots per treatment and your associated prices.
If you have any questions regarding financing and leasing, please contact us via our Contact form or by telephone / WhatsApp at 0170-2923947