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Creative Intelligence @ Your Service |
Site Map +1 214 234 9283 | Send Email |
Many major chain stores started holiday (meaning Christmas, Hanukkah, Kwanzaa, or any other end of year festivity where consumption is encouraged) advertising before Halloween! Isn't this a bit early? Not when Marketplace reports Black Friday has Wal-Mart worried about Christmas.
Perhaps as business owners we should start planning for year end saving, spending, and tax decisions a bit early too. So let's have a discussion of tax saving and spending consequences, talk about some (potentially) smart business buying decisions, and ponder a sobering report that excess consumerism may be a mental illness. Just in time for the holidays.
With the disclaimer that we do not offer accounting or legal advice and the recommendation to consult professionals in these fields before making a decision, here's a question: if one receives $1,000 in gross revenue from a business, what is the maximum that person can save?
The answer depends on one's tax bracket and business organization. Take the case of a sole proprietor in the 28% tax bracket: that person can save $570: the business earns $1,000, but Uncle Sam wants his 28% tax and 15% social security cut. $1,000 - $280 - $150 = $570. If the income recipient, however, is a corporation in the 36% tax bracket, then the corporation banks $640 instead: there is no social security tax on corporate income.
What happens if a business takes this revenue and, instead of saving, uses it to pay legitimate business expenses instead? Well, the business gets to put the entire $1,000 to work as expenses are not taxed. We're not advocating "willy-nilly" spending just so Uncle Sam doesn't get his cut—that's a mental illness, remember? But we do advocate factoring the true cost of saving versus spending before making any buying decision, including a decision to not buy.
Last year at this time we recommended the serious consideration of color laser printers for businesses with daily color printing needs. Refer to the November, 2006 article for details about the pros and cons of such a move. This year, however, let's put some numbers to those recommendations.
Spent $200 or more on printing ink in the past twelve months? Seriously consider buying a color laser printer. They start at $300 and include enough toner to print 2,000 pages. Which is about the same number of pages as $200 worth of printer ink.
All-in-one color laser units are still expensive, however, starting around $500. It may be more cost effective to purchase two units: a color laser and an ink-jet or monochrome laser all-in-one.
Already have a good quality all-in-one unit and don't need color? A monochrome laser printer costs about $100 and includes toner to print 1,500 pages. Black toner cartridges are about $80 and print 4,000 pages. Monochrome laser printers have the lowest per-page printing cost compared with any other printing technology.
This spring the Federal Communications Commission forced all television stations to start digital broadcasting and announced analog broadcasting will cease on March, 2009. The picture quality for digital over-the-air high definition, or HD, blows everything else (cable, dish, network) away. Which means by this time next year, HD will be everywhere.
How does this impact business? Three ways stand out: first, low cost HD monitors can be used as sales presentation tools. Second, pressure will mount to update video collateral for the new quality standard. Third, HD monitors are wonderful for the visually impaired.
Run a business where making sales presentations from a computer is key? Consider toting a $500 32" HD monitor instead of a video projector to the next local presentation. Setting up the monitor will be much simpler then setting up the projector. The projected image size will be more then adequate for viewing by a group of one or two dozen people. The resolution is as good or better then projectors costing double. And no replacing $250 bulbs every so often. The one disadvantage? It's easier to tote the projector on a trip involving air travel.
HD quality from marketing videos isn't exactly necessary, but demand for this will rise as households embrace the format en masse. Given the FCC's death sentence for analog broadcasting in two years, the business community has maybe that long to prepare.
A major impediment to this transition is format wars on the production and distribution sides of the equation. Video producers must choose among several incompatible formats, including AVCHD and HDV. While many formats can capture full HD quality, these two unfortunately use interframe compression. This makes editing difficult (though not impossible) and generates irritating display artifacts in busy scenes.
Distributing HD quality videos isn't easy either, thanks to another pair of incompatible formats: Blu-Ray and HD DVD. Both offer about ten times the storage of regular DVD on the same size video disc. Consumers burned by the battle between the Beta and VHS video formats will probably delay purchasing decisions until a clear winner emerges. In the meantime, HD content providers will need to support both formats.
These horse races are too close to call, but at gun point we'd pick HDV and HD DVD as the safest standards for today's investments. Reasons? Both of these formats are more backwards compatible with their predecessors then the others. For example, the Blu-Ray standard does not require players to read DVD discs, but the HD DVD logo means the player must read both.
Most HD sets include an analog D-15 sub connector or a DVI connector, or sometimes both, for connecting the display to a conventional computer. This is a boon for those with visual impairment: imagine all of the data available on a 19" screen increased to 32." Now instead of running the display at lower resolution to make the picture bigger, we have a low-cost way of just making the picture bigger! Some ergonomic design is necessary, and perhaps a wireless keyboard and mouse to view the screen from four to six feet away, but this technology helps bring computer access to more people.
While in the throes of the holiday season, consider this story from American Public Media:
Scott Jagow: Our need to constantly have more may be a disease. A mental illness, perhaps a physical one. Professor Peter Whybrow studies neuroscience and human behavior at UCLA. He's written a book called American Mania...
The story's web page has the audio and a text transcript of the story.
By the way, if you're interested in this sort of thing, use the email link below and we'll put you on a mailing list for our first quarter business development conference.
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