Owning and operating a restaurant can get very expensive, especially when you are first starting out. There are a multitude of steps you need to make to ensure your business is successful and make you money. One of the biggest investments you will make when starting a new restaurant will be purchasing the necessary equipment to operate your business properly.
The start up costs for owning a restaurant can be anywhere between tens of thousands of dollars to millions. If you can’t outright buy the equipment you need, there are many options you can explore to acquire your equipment. The two more popular options that will ease your mind and money are to either lease or finance the equipment. There is no “wrong” funding option to take when deciding to lease or finance, each have their own benefits and your final decision will depend on your specific situation.
Before you decide whether you want to lease or finance your equipment, you need to make a detailed list of everything you will need to start your restaurant. Every restaurant uses a variety of kitchen and bar equipment, you will need reliable pieces that you know will help your business run efficiently and effectively. All kitchens are required to have refrigeration to safely store food and ice machines for beverage services. If your restaurant will have a bar in it, additional equipment will be needed to support your staff in making fast and proper drinks. Perhaps you want to include a buffet into your restaurant. This will require more food preparation pieces (heaters, pans, ovens, and microwaves), along with multiple food storage areas.
Creating that list of equipment will be the first steps in determining if you should lease or finance as it will show you the total cost of the equipment to give you a sense of what you will need. Once you have that number, you should also predict how much money you reasonably expect to make in your first year of business, compare that to the start up costs and operating expenses to determine how much capital you will require.
The following article will outline the benefits for leasing and/or financing restaurant equipment and will highlight how each option will help grow and establish your business.
Financing your restaurant equipment allows you to make low monthly payments instead of dealing with the headache that comes with buying the equipment on the spot. The monthly payment option will remain consistent that you can incorporate into your budget. This means you can easily manage your monthly expenses while your business grows exponentially.
Once your payment schedule is complete, you get to keep the equipment. If you properly maintain and look after your equipment, they will start to add even more value to your restaurant. Since you won’t have to upgrade the equipment or continue to make monthly payments on them, your operation costs will decrease while you see a rise in your profits.
Leasing your restaurant equipment is a more flexible option for owners who are looking for used or soon to be outdated equipment. Much like financing, leasing your equipment comes at a low monthly cost.
The advantage of leasing is that you don’t have to own your equipment when it becomes outdated, or you want to upgrade to a better model when your business gains more money. You can structure your plan so you don’t have to exercise your final purchase option. If you want to keep your equipment at the end of your lease, you can do that as well. With that you can either purchase the equipment at its fair market value, or set up a new leasing option.
Remember, there is no wrong option when it comes to leasing or financing your equipment. When you create your solid business plan and outline every piece of equipment you require, the decision for you to take will become more clear. No matter what option you choose, our trusted team at ABM Food Equipment will assist you in creating your perfect finance or leasing plan.