Owning a restaurant is a potentially fun and lucrative career path, but there are a lot of costs you must consider before you can open your doors. One of the biggest decisions you will face is whether you should buy or lease your equipment. Leasing restaurant equipment has some advantages and disadvantages, so you should ask yourself a few questions in order to narrow things down.
How Much Startup Money Do You Have?
Many entrepreneurs do not have a large amount of money on hand at the outset of their businesses, so they must find ways to save. If you choose to purchase your restaurant equipment, you will either have to pay for it outright or pay a large down payment on a bank loan. One advantage to leasing restaurant equipment is that leases are easy to obtain and do not require a down payment. If you decide to lease, you can get your equipment quickly without burning a significant portion of your startup funds.
How Important Is Having Maintenance Coverage?
Purchased restaurant equipment often comes with a warranty that covers maintenance and repairs for a limited period of time. After the warranty expires, however, the owner is responsible for securing maintenance. You may be fully willing to shoulder this responsibility. If you lease, on the other hand, a maintenance plan is normally covered by your payments. This means that you will not have to worry about finding a provider if your equipment needs to be serviced. If you would rather write the checks and know that maintenance is covered, then leasing restaurant equipment might be a better fit for your business.
How Important Is Staying Up-to-Date?
If you purchase equipment for your restaurant and it becomes outdated a few years from now, you will be left with the problem of obtaining new equipment and getting rid of the older models. If you decide to lease your equipment, you will have the option of replacing your appliances with newer models every few years. This problem may have different implications for you depending on what kind of equipment your restaurant uses the most. Consider how much potential there is for the technology of your most-used equipment to change, as well as how advantageous it will be to your company to stay at the forefront of these technologies.
Your decision between buying and leasing restaurant equipment could have a significant impact on your company’s financial health. Be sure to carefully consider all of these questions in order to make the right move for your business.