BusinessReport.com

Same-day delivery can sway a sale at Mattress Direct, but these days the story behind the pitch might offer more comfort than a mattress itself.

While the nation debates whether it’s in a recession or not, Baton Rouge-based Mattress Direct co-owners Ty Hingle and Lee Burns are staying focused on a rare opportunity to grow faster than any time in their seven years in business.

“It’s outstanding that the government is allowing us as small business owners to not just benefit from a rebuilding benefit, but also economic stimulus to grow our business,” Hingle says. “We’ve not seen anything like this.”

After consulting their accountant, Laura Monroe of Hannis T. Bourgeois, they agreed to use the first-year 50% accelerated depreciation incentive with the GO Zone Act of 2005, which applied to hurricane-impacted parishes.

The partners bought three buildings, including the former Bank One building behind the Laurel Lea Shopping Center at the corner of Staring Lane and Highland Road, which is being renovated for their corporate office and training center. The current office is on Airline Highway. Mattress Direct also recently bought a location in New Orleans, recently expanded its Pensacola, Fla., location, and opened a new location in Meridian, Miss.

The February signing of the Economic Stimulus Act of 2008, aimed at revitalizing the national economy, made it possible for the company to fill other needs. It also includes a first-year 50% bonus depreciation, this time for capital equipment, which spurred the company to invest $350,000 in four new delivery trucks, bringing the total to 14, and new computer servers. The additions also made possible same-day delivery, upgraded the ability to inventory and boosted customer service.

Bill Potter of Postlethwaite & Netterville says the window of opportunity to take advantage of both GO Zone and Economic Stimulus is still open with good planning.

GO Zone’s property investment incentive ends Dec. 31 except in hardest hit parishes, but there’s still time for some projects. For example, Potter says, an automobile dealer could expand a showroom with GO Zone and buy the movable equipment for it through Economic Stimulus.

The overlapping opportunities are somewhat unusual, says Potter, who believes Congress saw GO Zone stimulate hurricane-impacted areas and decided it might do the same for the nation. Economic stimulus acts have been used to successfully grow the country since the Nixon Administration demonstrated it was fastest to grow the country through tax law. The Liberty Zone that followed the Sept. 11, 2001 terrorist attacks is an example.

“We saw a lot of people who decided to do something sooner to take advantage of GO Zone,” he says. “Many auto dealers wanted to expand showrooms, and there has been interest from people outside of Louisiana wanting to invest in Louisiana.”

Of the many inquiries he received, Potter recalls one call from an East Coast man who wanted to shelter $40 million and, when he heard it could be done with GO Zone, asked who could connect him to that deal. For Mattress Direct, Hingle calls the combined benefit of GO Zone and Economic Stimulus a godsend.

“When Katrina hit, seven of our stores were incapacitated and our employees dispersed throughout the nation,” he says. “Since that time, we utilized government subsidizing to help grow our business back.”

With Go Zone recovery incentives, Mattress Direct regrouped and expanded from eight to 21 locations in Louisiana, Mississippi, Alabama and Florida in the last 2 1/2 years.

“I do believe the influx of income from evacuees needing mattresses let us reinvest the money into the company, and it helped the company grow substantially,” Hingle says. “It’s a difficult situation to take a tragedy like that and say it helped us out, but you can see Baton Rouge’s economy is not suffering with the recession like the rest of the nation.”

But without economic incentives, he says they would not have been able to expand so quickly, which is why Hingle encourages other business owners to consult their CPA about these opportunities.

“They should consider these write-offs to stimulate their economy and their business,” Hingle says. “They need to jump on board. It’s money they’re throwing away. There are so many things they can do with positioning themselves for the future if they take advantage of these incentives.”