Buying Method Equations

The following equations are based on a treatment platform valued at $90,000 that uses interchangeable hand pieces to perform multiple treatments, including laser hair removal, IPL, photofacial and fractional.

Average treatment retail price

Laser hair removal: $200

IPL photofacial skin rejuvenation: $400

Fractional laser wrinkle reduction: $800

Cost of performing one of each treatment: $1,400

Average cost of the three treatments: $467

Potential monthly laser revenue based on performing two of each treatment per day in a 30-day month: $84,000

Cash: $90,000 paid up front

• Saves $19,500 in interest fees compared to a five-year 8% loan
• No loan or lease obligations
• Drains company capital
• Cost of laser per month if it was translated into monthly installments for five years: $1,500
• Average number of treatments a business needs to provide per month to gain 10% profit on monthly investment: 3.5

Financing with five-year 8% interest loan

• Laser: $90,000
• Total interest paid during five years: $19,500
• Total cost paid during life of loan (principle + interest): $109,500
• Loan payment per month: $1,825
• Credit-based; if you have had credit problems, you will have a difficult time getting financed.
• More complicated process than leasing
• No time restrictions; can be paid off early
• Average number of treatments a business needs to provide per month to gain 10% profit on monthly investment: 4.3

Leasing

• Laser: $90,000
• $2,200 per month on five-year lease plan
• Cannot terminate early
• Credit-based; if you have had credit problems, you will have a difficult time getting a lease
• Less complicated process than financing
• At end of lease, a 10–15% of market value buy-out fee may be paid by the lessee to buy laser
• Average number of treatments a business needs to provide per month to gain 10% profit on monthly investment: 5.2

Renting

• Average daily rental fee for $90,000 laser: $1,250
• No contract or long-term financial obligation
• Average number of treatments a business needs to give per day to gain 10% profit on daily rental cost investment: 2.9