Tax increases could cut into growth plans

Over the past two decades, Brian Perdue has expanded his wife’s hair stylist business into a small empire with five shops and more than 175 employees in Gwinnett County.

Monday, he’s opening a sixth shop in partnership with two former Deloitte & Touche consultants whom he has been mentoring for two years. The new shop, NiaNicole Salon, adds a new affiliate to complement Grayson-based 124 Group’s three brands, Salon 124, Genesis Salon and the Process Institute of Cosmetology.

Enlarge this image

CURTIS COMPTON/ccompton@ajc.com

Brian Perdue, CEO of 124 Group, talks with Jessica Wright, having her hair styled by Theresa Williamson at Salon 124 in Grayson. He said tax increases may slow business growth.

124 GROUP
• Founded: 1991
• Employees: 175-200
• Revenue: $5 million-$10 million
• Service: Operates hair salons and cosmetology school.

ECONOMIC CRISIS:
SMALL BUSINESS
• Engineers of nation's growth engine share election concerns
• Her vote goes to candidate who offers incentives, lower taxes
• Higher taxes are OK with him, but not waste, corruption
• Tax increases could cut into his growth plans

But the 46-year-old president of 124 Group fears that tax increases for high-income individuals could crimp his plans for growth.

“What most people don’t understand is the profits from the company don’t go into the owner’s pocket. It’s reinvested back into the business,” Perdue said.

Such concerns have become a campaign staple for Sen. John McCain, the Republican candidate, since Barack Obama’s famous encounter with a reluctant taxpayer who has come to be known as “Joe the plumber.”

Perdue, who is no relation to Gov. Sonny Perdue, said a tax increase on income over $250,000, as proposed by the Democratic presidential hopeful, would slow the growth of his business.

“Would you rather have a little bit of money that you are taking from me to give to somebody else, or would you rather I give them a job?” said Perdue, arguing that tax increases are “not the way to success.”

He said he’s not familiar with the two candidates’ health care proposals, but added that the high cost of employees’ medical coverage is a challenge.

“There’s only so much you can pass on to the customers in higher prices, so that is a big problem,” he said.

Perdue said his biggest worry, however, is the economic downturn.

“The one thing I cannot control is the economy, and I think we have gotten ourselves into a mess,” he said. It looks like it’s going to be the worst recession he’s seen since he went into business in 1991, he said. He added that he wouldn’t have chosen to open another salon now if he had known how severe the credit crunch was going to be.

Still, he’s confident that he’ll do OK and could even gain some market share if he concentrates on making his company more efficient.

“I’m very positive about it,” he said. “I get to actually slow down and work on the business.”