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Business Operations

Gimme a break

October 11, 2010
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As I sorted through the answers for this month’s Tides of Carwashing section, I became painfully aware that many readers are either unaware or confused about the small business considerations included in the 2008 Economic Stimulus Package.

In a nutshell, the economic stimulus package doubles the small business expensing limit from $125,000 to $250,000. This break is only for businesses that invest less than $800,000 in their business in 2008, but that would be most carwash owners I know. The stimulus package also provides a “bonus” depreciation for investments. This means a business can take an immediate deduction of 50 percent of the investment, rather than deducting the value over a number of years.

What does this mean for your carwash business? Well, it will certainly make it more viable to purchase or update equipment, as well as property, in 2008. But, as many readers have already indicated, it will do little to solve the larger, looming problem — consumers simply aren’t spending the dollars they used to on smaller, discretionary purchases. For small businesses struggling to stay afloat, the tax breaks do little as they are unlikely to be spending any money to improve their businesses in 2008 like the government hopes. (See our poll on p.18 for more concrete evidence.)

Judging by the media coverage, I’m guessing you’re at least familiar with the other part of the economic stimulus package — a tax rebate for most Americans that equals about $600 per person. Media theories claim Americans will use the money to buy groceries and pay off credit cards; or will waste the money on expensive TVs and furniture or a trip to Vegas (like the government hopes) Or, Americans will throw the money in savings and it will do nothing to invigorate the American economy.

The theories are just that; theories. By the time you read this article, the checks will have been hitting American mailboxes and checking accounts for about a month and the reality will have sunk in. The predictions on the daily news will be replaced with bar graphs and charts showing the impact (or lack of impact) the rebates have made.

For our sakes, let’s hope for lots of pollen and construction dust. Let’s hope for sunny days that encourage long drives through the countryside and more media coverage on the environmental benefits of professional carwashes. Or, we could stop depending on the government and the media and the weather, and start initiating our own programs and PR efforts. Let’s get on the phone and call the newspaper. Let’s put out a sign at the front of the carwash that says, “We recycle water.” Let’s roll up our sleeves and start washing cars. Because if we are to stay afloat, we’ll have to also stimulate our businesses.


Kate Carr is the editor in chief of Professional Carwashing & Detailing® Magazine and is taking her rebate check to Vegas — hah! She wishes. You can send your grumbling, compliments and suggestions to kcarr@carwash.com.

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